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Resolution No. 2180RESOLUTION NO 2180 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CYPRESS AUTHORIZING THE ISSUANCE OF SINGLE FAMILY RESIDENTIAL MORTGAGE REVENUE BONDS, ISSUE OF 1980 WHEREAS, pursuant to the provisions of its Ordinance No 650, the City of Cypress is authorized to make lona- term, low interest °iortgage Loans through Qualified Mortgage Lenders to finance Residential Acquisition in order to assist Low and Moderate Income Persons and Families in acquiring, owning, improving, and maintaining decent, safe, and sanitary housing within the City and WHEREAS, all acts, conditions and things required by law to exist, happen and be performed precedent to and in connection with the issuance of said revenue bonds exist, have happened and have been performed in regular and due time, form and manner as required by law, and this City is now duly empowered to issue said revenue bonds; L,OW, THEREFORE IT IS HEREBY RESOLVED AS FOLLOWS: ARTICLE I STATEMENT OF AUTHORITY AND DEFINITIONS 101 Authority and Purpose This Bond Resolution is adopted under the authority and in accordance with the provisions of the Ordinance, for the purpose of assisting Low and Moderate Income Persons and Families in acquiring owning, improving, and maintaining affordable single family residential dwelling units in the City and for the purpose of establishing covenants, agreements and procedures to assure that Revenues received from Financing Mortgage Loans will be sufficient for the repayment of money borrowed for this purpose, and that Revenues exceeding the amounts needed for this purpose will be applied in accordance with law 102 Resolution Constitutes Contract In consideration of the purchase and acceptance of any and all of the Bonds issued hereunder by those who shall hold the same from time to time, this Resolution shall be deemed to be and shall constitute a contract among the City, the Trustee and the Holders of the Bonds and the coupons appertaining thereto The pledge made in this Resolution and the provisions, covenants and agreements herein set forth to be performed by 229 or on behalf of the City shall be for the equal benefit, protection and security of the Holders of any and all of the Bonds and said coupons All of the Bonds and said coupons, without regard to the time or times of t-eir issuance or maturity shall be of equal rank without preference, prior- ity or distinction of any of the Bonds or said coupons over any other thereof, except as expressly provided in or per- mitted by this Resolution 103 Definitions In this Bond Resolution, unless a different meaning clearly appears from the context, the following terms have the following respective meanings: Accountant's Certificate means an opinion signed by an independent certified public accountant or firm of certified public accountants (who may be the accountant or firm that regularly audits the books and accounts of the City) from time to time selected by the City Annual Adjusted Family Income means the total current annual income from whatever sources derived, less trade or business expenses and before taxes or withholdings of all persons who intend to occupy a Residence as their principal place of residence, adjusted for household size (i) by increasing said total current annual income by $2 000 for a household consisting of one person, or by $1,000 for a household consisting of two persons or (ii) by decreasing said total current annual income by $1,000 for each member of a household in excess of three, and further adjusted by deducting therefrom: (a) any income of a temporary nature not related to the person's regular employment, to the extent consistent with the customary underwriting standards of the Qualified Mortgage Lender; (b) income of any such person who is a minor or who is physically or mentally handicapped (c) unreimbursed medical and dental expenses for the twelve-month period preceding the application for the Mortgage Loan (but only to the extent that such expenses exceed three percent of income)• and (d) the lesser of $2,500 or one-half of the annual earnings of adult family secondary wage earners (as determined by the Qualified Mortgage Lender under its normal underwriting criteria) Appraiser means a person or firm in the business of valu- ing real property whose opinion of value with respect to real property is commonly relied upon by private mortgage lenders in the vicinity of the City and who is accepted as an ap- praiser by FNMA Asset Coverage Test means a mathematical formula used to determine when Revenues pledged to the security of the Bonds may be released to the City, free and clear of the lien of such pledge The Asset Coverage Test is met and -2- 1 230 Revenues may thereupon be so released when the sum of (i) the outstanding principal amount of Mortgage Loans and (ii) all amounts held in the Mortgage Loan Purchase Account, Principal Fund, Sinking Fund, Debt Service Reser/e Fund Mortgage Reserve Fund and Residual Fund equals the sum of the principal amount of Bonds then Outstanding plus two and ore -half percent (2-1/2%) of the original pri:cinal amount of the Bonds• provided, however that Permitted Investments held in the Debt Service Reserve Fund and the '-lortgage Reserve Fund shall be valued, for the purpose of determinirg the amounts held therein, at the lower of cost or market price thereof, exclusive of accrued interest Asset Coverage Test Certificate means an Accountant's Certificate from a nationally -recognized firm of certified public accountants setting forth as of the date thereof or as of the date not more than 15 days prior to the date thereof (i) the outstanding principal amount of all Mortgage Loans, (ii) all amounts held in the Mortgage Loan Purchase Account, Principal Fund, Sinking Fund, Debt Service Reserve Fund, Mortgage Reserve Fund, and Residual Fund (valued in the case of Permitted Investments held in the Debt Service Reserve Fund and the Mortgage Reserve Fund at the lower of cost or market price thereof, exclusive of accrued interest) and (iii) the then Outstanding principal amount of 3onds and stating whether the Asset Coverage Test has peen met and, if the Asset Coverage Test has been met, further setting forth (iv) the principal amount of Bonds to be redeemed from amounts held in the Residual Fund in order to maintain com- pliance with the asset Coverage Test (v) the amounts to be held in the Mortgage Reserve Fund by reason of a reduction in the Mortgage Reserve Requirement on the next succeeding Interest Payment Date, and (vi) the amount which may be made available to the City for any lawful purpose free of the lien of the Resolution, on the next succeeding Interest Payment Date Authorized Newspapers means a financial paper, or a newspaper of general circulation in the City of Los Angeles, California, and the Daily Bond Buyer or other financial paper or newspaper circulated in the City and State of New York each of which is published at least once a day for at least five (5) days (other than legal holidays) in each calendar week, and is printed in the English language Authorized Officer means the Mayor City Clerk, City Manager, or Finance Director of the City or any other person authorized by resolution of the City to perform an act or sign a document in connection with the Program Bond or Bonds means any Bond or Bonds, as the case may be, authorized and issued under this Resolution -3- A 231 Bondholder or Holder or Holders of Bonds or an4I0Oilar term, when used with respect to Bonds means any peegon who shall be the bearer of any Outstanding Bond or Bonds regis- tered to bearer or not registered or the registered owner of any Outstanding Bond or Bonds which shall at the time be registered other than to bearer Holder, when used with respect to coupons means any person who is a bearer of any such coupons Bond Proceeds Fund means the Fund by that name estab- lished by Section 501 Bond Purc:^ase Contract means the Purchase Contract, dated January 14, 1980, by and between the City and Shearson Loeb Rhoades Inc wherein the City agrees to sell and Shearson Loeb Rhoades Inc agree to purchase the Bonds Bond Register means the books kept hereunder by the Trustee for registration and transfer of the Bonds Bond Year means the twelve (12) month period commencing on the Issue Date and on each Principal Payment Date there- after Certificate of Pro-iected Pledged Revenues means an Officer's Certificate showing as of any particular date: (1) for the current and each future Bond Year t' -ie scheduled or estimated amount of Pledged Revenues to be received in each such Bond Year and the Debt Service for each such Bond Year with respect to all Bonds to be Outstanding immediately after the issuance of the Certificate- (2) ertificate- (2) in each such Bond Year, the difference be- tween (i) the Debt Service referred to in (1) above, and (ii) the Pledged Revenues referred to in (1) above (3) that (i) such scheduled and estimated Pledged Revenues and any other revenues, investment income or funds reasonably estimated by the City to be available for the payment of such Debt Service referred to in (1) above are in each such Bond Year in excess of such Debt Service for each such Bond Year, and (ii) the remaining balance of such scheduled and estimated Pledged Revenues and other revenues, investment income or other funds available to pay budgeted or estimated Operating Costs in each such Bond Year will be sufficient to pay budget- ed or estimated Operating Costs for each such Bond Year, the payment of which is not otherwise provided for• and -4- 1 - 2 3 2 (4) if applicable, a schedule of Permitted Investments purchased or to be purchased by or on behalf of the City for investment of moneys in the Debt Service Reserve Fund Mortgage Reserve Fund and Mortgage Loan Purchase Account City means the City of Cypress or any body, authority agency, or other entity which shall hereafter succeed to the powers, duties and functions of the City City Council means the City Council of the City or its successor as the City s principal legislative body Condominium Unit_ means a single family dwelling which: (i) is a part of real property which has been subjected to a recorded Declaration of Condonminium (or a Master Deed or a sim- ilar instrument) pursuant to Title 6 commencing with Section 1350, of Part 4 of the Civil Code of the State or other applicable law; and (1') the ownership of which includes the ownership in fee of a specified residential unit together with an undivided pro rata interest in appurtenant real estate and any improvements thereon; and (iii) for purposes of calculating limitations on the amount of Mortgage Loans which may be made with respect to condominiums shall include any townhouse rowhouses (i e any attached or semi-detached single family dwelling) Costs of Issuance means items of expense payable or reimbursable directly or indirectly by the City and related to the authorization sale and issuance of the Bonds, which items of expense shall include but not be limited to, printing costs costs of reproducing and binding documents filing and recording fees, initial fees and charges of the Trustee Special Hazard Insurance premiums Bond discounts, legal fees and charges, professional consultants fees costs of credit ratings the costs of verification of mathmatical computation, fees and charges for execution transportation and safekeeping of Bonds and other costs charges and fees in connection with the foregoing Counsel's Opinion means an opinion signed by any attorney or firm of attorneys licensed to practice in the state in which said attorney or firm maintains an office, selected by the City County Recorder means the County Recorder of the County of Orange California Debt Service means the sums obtained for any Bond Year after the computation is made by totaling the following for each such Bond Year. (1) The Principal Installment payable in such Bond Year; and -5- 233 (2) The Interest Requirement payable in such Bond Year on the aggregate principal amount of Bonds which would be Outstanding in such Bond Year if the Bonds Outstanding on the date of such computation were to mature or be redeemed in accordance with the maturity schedule or schedules for Outstanding Serial Bonds and the schedule or schedules of Sinking Fund Installments for Outstanding Term Bonds At the time and for the purpose of ma:cing such computation, the amount of Term Bonds already retired in advance of the above mentioned schedule or schedules shall be deducted from the remain- ing amounts thereof in accordance with the reduction in Sinking Fund Installments made pursuant to Section 401 hereof Debt Service Reserve Fund means the Fund by that name established by Section 501. Debt Service Reserve Requirement means, an amount equal to 100% of the Maximum Annual Debt Service (rounded to the next highest integral multiple of $5,000) scheduled to be paid on the Bonds, determined as of the Issue Date of the Bonds. Delivery Date means, with respect to a :•Iortgage Loan the date on which the City receives the mortgage loan appli- cation package from the Seller Defaulted Mortgage Loan means any Mortgage Loan de- scribed in an Officer's Certificate and stated to be in default in accordance with its terms or any Mortgage Loan not so described in an Officer's Certificate on which pay- ments are sixty (60) days in arrears Escrow Account means accounts held by Servicers or by the City for the making of Escrow Payments pursuant to Section 610. Escrow Payments means all payments made in order to obtain or maintain Mortgage Insurance and any payments required to be made with respect to Mortgage Loans for taxes or other governmental charges or other similar charges to a Mortgagor customarily required to be escrowed Event of Default means any of the events specified in Section 1201. Fair Market Value means the lower of (i) the value of the Residence as determined by an Appraiser, or (ii) the sale price of the Residence. -6- 1 234 Federal Securities means United States 'nreasury notes, bonds, bills or certificates of indebtedness or those for which the full faith and credit of the United States are pledged for the payment of principal and interest, and whit,!" are not redeemable in advance of their maturity at the option of the issuer or any other person (other than the holder thereof) including United States Treasury (book entry) certificates, notes and bonds, state and local aov- ernment series FHA means the Federal Housing Administration or other agency or instrumentality of the United States to which the powers of the Federal Housing Administration have been transferred FHLMC means the Federal Home Loan Mortgage Corporation or other agency or instrumentality of the United States to which the powers of the Federal Home Loan Mortgage Corpora- tion have been transferred Financing means the lending of moneys or any other thing of value for the purpose of facilitating Residential Acquisition pursuant to the Ordinance and includes the making of Mortgage Loans to purchasers of Residences and the purchase, servicing and selling of Mortgage Loans Fiscal iear means any twelve (12) consecutive calandar months commencing with the first day of July and ending on the last day of the following June FNMA means the Federal National Mortgage Association or other agency or instrumentality of the United States to which the powers of the Federal National Mortgage Associa- tion have been transferred Fully Registered Bonds means Bonds registered as to principal and interest and payable to the registered owner Fund or Account means a Fund or Account created by or pursuant to this Resolution Funding Date means the date on which the Trustee dis- burses to the Seller the payment for a Mortgage Loan Hazard Insurance means insurance, issued by a person qualified to issue such insurance in the State, which pro- vides coverage at least equal to the following: (i) that provided by a Dwelling Building Special Form all risk policy which insures the Residence from loss in an amount at least equal to either the outstanding principal amount of the Mortgage Loan or 90% of the insurable value based upon the replacement cost of the Residence, whichever is larger, and includes an inflation guard endorsement• (ii) coverage -7- r-- 1 insuring against risk of loss due to earthquake (if such coverage is commercially available) in an amount equal to at least 100% of the outstanding principal balance of the Mortgage Loan, subject to a 5% deductible per occurrence, and (iii) in the case of a Condominium Unit, if the applic- able standard master hazard policy does not meet the fore- going criteria the coverage provided by a Difference in Conditions policy which policy must provide coverage to at least 100% of the outstanding principal balance of the Mortgage Loan, subject to a 5% deductible Hazard Insurance shall be carried and paid for by the Mortgagor (except that in the case of a Condominium Unit, such insurance, other than the Difference in Conditions Policy, shall be carried by the condominium association) Independent when used with terms defining any profes- sional, means any person or firm, respectively, appointed by the City in such capacity and who, or each of whom, has a favorable reputation in the field in which his opinion or certificate will be given, and, (1) is in fact independent and not under domina- tion of the City; (2) is not connected with the City as an officer or employee of the City, but who may be regularly retained to make reports to the City; and (3) except in the case of an Appraiser, is not regularly employed by, or under the domination of a Qualified Mortgage Lender Interest Fund means the Fund by that name established by Section 501 Interest Payment Date means each date on which interest on any Bonds is required to be paid by this Resolution Interest Requirement means, as of any particular date of calculation, the amount equal to any unpaid interest then due, plus an amount which will on the next succeeding Inter- est Payment Date be equal to the interest to become due on the Bonds on such next succeeding Interest Payment Date Issuance Expense Account means the Account by that name established by Section 501 Issue Date means the date of the coupon Bonds specified and determined in accordance with Article II, except as otherwise provided in Section 304 in the case of Fully Registered Bonds. Low and Moderate Income Persons and Families means persons and families whose Annual Adjusted Family Income does not exceed 120% of the Median Household Income in the -8- 235 236 City as determined from time to time by the City Council of the City or its duly authorized representative Maximum Annual Debt Service means the largest of the sums obtained by adding for each Fiscal Year the Principal Installment and the interest on the Bonds which will become due during the Fiscal Year Median Household Income in the City means $23,442 which the City determines to be the annual income for a household in the City which, as of July 1, 1979, was higher than the annual incomes of approximately half of the house- holds within the City and lower than the annual incomes of approximately half of the households within the City This determination is subject to adjustment semiannually on or before March 1 and September 1 of each year through 1983 (1984, if the period within which Mortgage Loans may be purchased has been extended) Until more recent census statistics are available in a form which the City determines to be reasonably definitive, Median Household Income in the City will be calculated by adjusting the median household income for the City reported in the 1976 special census ($19,954) in accordance with the percentage change in the corresponding median household income for the County of Orange reported by the United States Department of Housing and Urban Development ("HUD") or, until corresponding HUD data are available, in accordance with the percentage change in the Consumer Price Index for all urban consumers in the Los Angeles/Long Beach/ Anaheim, California reporting area as provided by the United States Department of Labor Mortgage means a deed of trust or other instrument which constitutes a first deed of trust and lien in the State on real property and improvements thereon, together with a promissory note, the holder of which is either the City the Trustee or a Mortgage Lender where the debt is secured by real property located as required in the Ordinance and is improved by a Residence Mortgage Insurance means an insurance policy or a guaranty issued by a Mortgage Insurer, insuring or guarantee- ing in whole or in part the principal of and interest pay- ments on the Mortgage Loans at least to the levels of insur- ance specified in the definition of Private Mortgage Insur- ance Mortgage Insurer means any person licensed to insure mortgages in the State and qualified to provide Insurance or a guaranty on mortgages purchased by FNMA or FHLMC and approved by the City Mortgage Insurance Proceeds means the proceeds of Mort- gage Insurance -9- Tortgage Loan means an interest-bearing obligation made for the purpose of Financing Residential Acquisition and secured by a Mortgage, the payment of which is insured by Mortgage Insurance Mortgage Loan Purchase Account means t'e Account estab- lished by Section 501 :Mortgage Reserve Fund means t'. -e Fund so designated which is established and created by Section 501 Mortgage Reserve Requirement means an amount equal to three percent (3%) of the aggregate unpaid principal amount of the Mortgage Loans held by the Trustee at the time of calculation, provided, that the Mortgage Reserve Require- ment shall be not less than $605,000 until January 1, 1983, and not less than $250,000 thereafter Mortgage Loan Purchase Agreement means an agreement by and among the City, the Trustee and a Qualified Mortgage Lender for the purchase of Mortgage Loans pursuant to sub- section (C) of Section 504, and includes all of the Purchase Documents as defined in the Sellers' Guide Mortgagor means the obligor or obligors under a :Mortgage Loan, who must qualify as a Participating Party under the Ordinance Officer's Certificate means a certificate of the City signed by an Authorized Officer and filed with the Trustee Operating Expenses means and is limited to fees and ex- penses of the Trustee and Paying Agents, Special Hazard Insurance premiums, administrative expenses of the City and accountant's and auditor's fees incurred in connection with the performance of the City's duties under the Resolution Operating Fund means the fund by that name established by Section 501 Ordinance means Cypress Ordinance No 650, entitled "An Ordinance of the City Council of the City of Cypress Provid- ing for an Affordable Home Ownership and Rehabilitation Program and for the Issuance of Residential Mortgage Revenue Bonds in Connection with Said Program " Outstanding, when used with reference to Bonds and as of any particular date, describes all Bonds theretofore and thereupon being delivered except (i) any Bond cancelled by the Trustee or any Paying Agent at or before said date; (ii) any Bond for the payment or redemption of which either -10- 1 237 238 IN (a) mo^eys, equal to the principal amount or Redemption Price thereof, as the case may be, with interest to the date of maturity or redemption date, or (b) Federal Secur- ities or moneys as described and required under the provi- sions of subsection (8) of Section 1401, shall have there- tofore been deposited with the Trustee in trust (whether Ipon or prior to maturity or the redemption date of such Bond) and except in t',e case of a Bond to be paid at matur- i ti, of which notice of redemption shall ha re been given or provided for in accordance with Article IV; and (iii) any Bond in lieu of or in substitution for which another Bond shall have been delivered pursuant to Sections 307, 310 312, 3i3, 405 and 1106 Participating Party means any person or persons re- quiring Financing for Residential Acquisition and qualify- ing pursuant to the provisions of the Ordinance and whose Annual Adjusted Family Income does not exceed 120% of the Median Household Income in the City and who meets such other criteria to participate in the Program as the City Council may from time to time establish Paying Agent means each bank or trust company or nation- al banking association appointed pursuant to Section 802 to act as agent of the City for the purpose of paying Pri:,cipal Installments and interest on the Bonds, and each successor or successors, and any other bank or trust company or nation- al banking association at any time substituted in its place pursuant to this Resolution Permitted Encumbrances, when used with respect to Mort- gage Loans means those liens covenants, conditions re- strictions, easements, encroachments or rights which are customarily waived or accepted by prudent lending institu- tions and the existence of which will not prevent the con- veyance of good title to a mortgaged Residence if a claim for Mortgage Insurance benefits with respect thereto shall thereafter be made by the Trustee or a Servicer on behalf of the City and shall include those liens and encumbrances set forth in Section 3 102(c) of the Sellers' Guide Permitted Investments means any of the following which at the time are legal investments for the City under the laws of the State, and to the extent provided by law, for the moneys held hereunder then proposed to be invested therein• (i) time or demand deposits in, or other banking arrangements with any bank or trust company having aggre- gate capital and surplus of at least $50,000,000 and auth- orized to accept deposits of public funds (including the banking department of the Trustee), which are secured at all -11- lir 1 times by obligations for which the full faith and credit of the United States are pledged for the payment of prin- cipal and interest, (ii) United States Treasury notes, bonds, bills or certificates of indebtedness or obligations for which the full faith and credit of the United States are pledged for the payment of principal and interest; (iii) obligations, participation certificates, or other instru- ments of, or issued by, or fully guaranteed as to principal and interest by, FN'IA, or obligations, participation certi- ficates or other instruments of or issued by a federal agency or a United States Government sponsored enterprise, or (iv) repurchase agreements secured by any of the above. Pledged Revenues means Revenues and Mortgage Insurance Proceeds Prepayment means any amount received or recovered which reduces or eliminates the principal amount of any Mortgage Loan other than scheduled amortization payments of the principal amount of any Mortgage Loan, including any prepay- ment penalty, fee, premium or other such additional charge Principal Fund means the Fund by that name established by Section 501 Principal Installment means, wit: respect to any parti- cular Principal Installment Date, an amount equal to the sum of (i) the aggregate principal amount of Outstanding Bonds payable on such Principal Installment Date (but not includ- ing Sinking Fund Installments) and (ii) the aggregate of Sinking Fund Installments with respect to all Outstanding Term Bonds payable on such Principal Installment Date Principal Installment Date means the date on which Principal Installments are required to be made pursuant to Section 303 Principal Office, when used with respect to the Trustee or any Paying Agent, means the principal or corporate trust or head or principal trust office of such Trustee or Paying Agent situated in the city in which such Trustee or Paying Agent is described as being located Principal Requirement means, as of any particular date of calculation and with respect to the Bonds Outstanding on said date of calculation, the amount of money equal to any unpaid Principal Installment then due, plus the Principal Installment to become due on the Bonds on the next succeed- ing Principal Installment Date -12- r� ? 240 Prior Redemption Fund means the Fund so designated which is established and created by Section 501 Private . Zortgage Insurance means insurance issued by a Private Mortgage Insurer under which the Private Aortgage Insurer, upon foreclosure or other recovery proceedings and conveyance of a marketable title to the mortgaged property, must pay a claim including unpaid principal, accrued inter- est and expenses of foreclosure or other recovery proceed- ings or in lieu thereof may permit the mortgagee or its assignee to retain title and may pay an agreed percentage of the claim In order to qualify as Private Mortgage Insur- ance, the amount thereof must be at least (i) forty percent (40%) of the outstanding principal balance of any Mortgage Loan which is in excess of ninety percent (90%) and up to and including ninety-five percent (95%) of Fair Market Value• (ii) thirty-five percent (35%) of the outstanding principal balance of any Mortgage Loan which is in excess of eighty percent (80%) and up to and including ninety percent (90%) of Fair Market Value, (iii) twenty-five percent (25%) of the outstanding principal balance of any Mortgage Loan in excess of seventy percent (70%), and up to and including eighty percent (80%) of Fair Market Value• (iv) fifteen percent (15%) of the outstanding principal balance of any Mortgage Loan in excess of sixty percent (60%) and up to and including seventy percent (70%) of air Market Value, and (v) ten percent (10%) of the outstanding orincipal balance of any Mortgage Loan equal to sixty percent (60%) or less of Fair Market Value Private Mortgage Insurer means a Mortgage Insurer, other than the FHA, VA or an instrumentality of the State, which is recognized by Standard & Poor's Corporation as a company whose guarantee may elevate the credit rating of securities secured by a pool of conventional single-family mortgages to AA Program Documents means this Resolution, the Rules and Regulations, the Mortgage Loan Purchase Agreements, the Sellers' Guide, the Servicing Agreements, and the Servicers' Guide Purchase Documents means (i) the Mortgage Loan Purchase Agreement, (ii) the Mortgage Loan Application Package and (iii) the additional documentation submitted by the City and the Seller to the Trustee following the Delivery Date and prior to the Funding Date Qualified Mortgage Lender means any state or national bank or trust company, savings and loan association or mortgage banker authorized to acquire, hold and deal in mortgages and approved by the FHA as a mortgagee of mort- -13- C 1 gages insured or guaranteed by the FHA or by the FNMA or FHLMC as a seller/servicer Such Qualified Mortgage Lender shall have and place of business in the State shall the City to do business with the City and to aid in Financing pursuant to the Ordinance on behalf of the City the VA and approved of mortgages a principal office be authorized by Qualified Mortgage Lender Trust Account means the account or accounts by that name established by Section 505 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 Requisition means an order directing the Trustee or a Mortgage Lender to pay money from one of the Funds or Accounts established herein, duly executed by an Authorized Officer Residence means real property within the City improved with a single-family residential structure which has a remaining useful life such that a Mortgage Loan could be made on such real property consistent with prudent lending practices and the Financing of the acquisition of which is or may hereafter be permitted under the Ordinance Residence includes Condominium Unit Residential Acquisition means the purchase of a Residence by a Participating Party Residential Mortgage Financing Program or Program means and includes any act or thing done by the City, the Trustee, and any Qualified Mortgage Lender under the Resolution for the purposes of alleviating the shortage of affordable housing and encouraging and assisting Residential Acquisition by providing Financing for Residential Acquisition through the making of commitments to purchase, and the purchase servicing and selling of Mortgage Loans Resolution or Bond Resolution means this Resolution, as from time to time amended or supplemented by Supplemental Resolutions in accordance with the terms hereof Revenue Fund means the Fund by that name established by Section 501 Revenues means all payments proceeds, charges, rents and all interest and other income derived in cash by the Trustee or a Servicer by or for the account of the City from or related to the Program, including, without limiting the generality of the foregoing, scheduled amortization -14- payments of principal of and interest on Mortgage Loans, Prepayments, the proceeds of sale of Mortgage Loans the proceeds of sale of Residences on foreclosure of or other recovery proceedings with respect to Defaulted Mortgage Loans (net of amounts required to be paid to Mortgagors or other owners of Residences) the proceeds of Hazard Insur- ance and Special Hazard Insurance (net of the amount applied to restore a mortgaged Residence) and interest earned or income derived from the investment or deposit of moneys held by the Trustee, and Mortgage Insurance Proceeds but not including Escrow Payments Servicers and financing fees Rules and Regulations means the Rules and Regulations of the Program as adopted by the City Council Sellers' Guide means the Sellers' Guide Conventional Mortgages which governs the sale of conventional Mortgages to the City Serial Bonds means Bonds so designated in this Resolution Servicer means any Qualified Mortgage Lender who shall agree by a Servicing Agreement with the City and the Trustee to service Mortgage Loans Servicers' Guide means the Servicers' Guide for the servicing of conventional Mortgages for the City Servicing Agreement means a contractual agreement by and among the City, the Trustee and a Servicer for the servicing of Mortgage Loans by the Servicer and includes the Servicers' Guide Sinking Fund means the Fund so designated which is established and created by Section 501 Sinking Fund Installment means, with respect to any particular date the amount of money required by or pursuant to this Resolution to be paid by the City on such date toward the retirement of the Term Bonds prior to their respective stated maturities Special Hazard Insurance means insurance, commonly referred to as "Difference in Conditions" insurance, which shall protect from losses on Residences caused by hazards, such as flood mudslide and earthquake not covered by Hazard Insurance, and losses resulting from the application of a coinsurance clause in the Hazard Insurance policies Such Special Hazard Insurance shall be carried by the City, with the premiums payable from the Operating Fund (except for the first annual premium which shall be paid from the -15- atia 0-7-74 1 1 ( 0 Issuance Expense Account), and shall cover each Residence and shall be in an amount at least equal to the greater of one percent (1%) of the original principal amount of all Mortgage Loans purchased by the City or twice the original principal amount of the largest Mortgage Loan. In addi- tion, in the case of a Condominium Unit for which the master hazard insurance policy does not meet the criteria of Hazard Insurance as defined hereinabove, the Mortgagor must provide a Difference in Conditions policy with coverage of 100% of the outstanding principal amount of the Mortgage Loan, subject to a 5% deductible; and this obligation of the Mortgagor may be met through the Mortgagor's purchase of such coverage under the City's policy of Special Hazard Insurance State means the State of California Supplemental Resolution means a resolution supplemental to or amendatory of this Resolution duly adopted by the City in accordance with Article X. Term Bonds means Bonds so designated in this Resolution Trustee means Security Pacific National Bank and its successor or successors and any other bank or trust company or national banking association at any time substituted in its place pursuant to this Resolution VA means the Veterans Administration or other agency or instrumentality of the United States to which the powers of the Veterans Administration have been transferred Words of the masculine gender include the feminine and neuter genders Words importing the singular number include the plural number and vice versa Words importing persons shall include corporations and associations, including public bodies, as well as natural persons. The terms "hereby", "hereof", "hereto", "herein", "hereunder", and any similar terms, as used in this Resolu- tion, refer to this Resolution 104. Security and Nature of Bonds The Bonds shall be and are special obligations of the City and, subject to the right of the City to apply moneys as herein provided, are hereby secured as provided in Section 601 hereof by an irrevocable pledge of the Mortgage Loans and Pledged Re- venues, and Funds and Accounts held by the Trustee and are payable as to principal, Redemption Price, if any, and interest from the Pledged Revenues of the City The Bonds ✓r Ara. .. .. .+ o ..ti.r..ae ilwf .Y.r1ia1. -16- ;ifo 243 ...• .. .. bo. ed..f.... ...rJ.".- _. 244 are not a debt of the City, the State or any of its politi- cal subdivisions; and neither the City, the State nor any of its political subdivisions is liable thereon; nor in any event shall the Bonds be payable out of the funds or pro- perties of the City other than all or any part of the Pledged Revenues, Mortgage Loans, and Funds and Accounts as in this Resolution set forth The Bonds do not constitute an indebted- ness within the meaning of any constitutional or statutory debt limitation or restriction Neither the members of t'Ze City Council nor any persons executing the Bonds shall be liable personally on the Bonds or subject to any personal liability or accountability by reason of the issuance t':ere- of The Bonds shall be and are equally secured by an irre- vocable pledge of the Mortgage Loans Pledged Revenues and Funds and Accounts as herein provided, without priority for number, date of sale, date of execution, or date of delivery, except as expressly provided herein The validity of the Bonds is not and shall not be dependent upon the performance of anyone of his obligation relative to the Program -17- a • 1 ARTICLE II AUTHORIZATION AND ISSUANCE OF BONDS 201 Authorization of Bonds In order to provide funds for the Financing of Residential Acquisition, Bonds of the City to be known and designated as 'Single Family Resi- dential Mortgage Revenue Bonds of the City of C'oress, California Issue of 1980" are hereby authorized to be issued in the aggregate principal amount of $25,000,000 202 Purposes The purposes for which the Bonds are being issued are (i) to pay the Costs of Issuance of the Bonds, (ii) to pay into the Debt Service Reserve Fund the amount required to be paid therein in order to establish the Debt Service Reserve Fund in an amount not less than ti,e Debt Service Reserve Requirement, (iii) to pay into the Mortgage Reserve Fund the amount required to be paid therein in order to establish the Mortgage Reserve Fund, and (iv) to provide funds with which to purchase Mortgage Loans to provide Financing for Residential Acquisition, all to the extent and in the manner provided in Article V of this Resolution 203 Date and Aaturities The Issue Date of the Bards shall be January 1, 1980 Me Bonds shall mature on the dates and in the principal amounts, and shall bear interest at the rate or rates indicated herein: Maturity Date January 1 Amount 1982 1983 1984 1985 1986 1987 1988 $180,000 195,000 210,000 225,000 245,000 265,000 290,000 Interest Rate 7 25 7 25 7 30 7 40 7 50 7 60 7 70 Maturity Date January 1 1989 1990 1991 1992 1993 1994 1995 2012 Amount 310,000 335 000 365,000 400,000 435,000 470,000 510,000 20,565,000 245 Interest Rate 7 80 7 90 8 00 8 15 8 25 8 35 8 35 8 90 The Bonds maturing January 1, 1982, through January 1, 1995, shall be Serial Bonds, and the Bonds maturing January 1 2012 shall be Term Bonds 204 Interest Payments The Interest Payment Dates of the Bonds shall be January 1 and July 1 of each year, commencing January 1, 1981 Registered Bonds shall bear interest from their date, payable on and after January 1, 1981, on January 1 and July 1 of each year -18- 246 205 Denominations, Numbers and Letters. The Bonds shall be issued in the denomination of $5,000 each in the case of coupon Bonds, and in the denomination of $5 000, or an integral multiple thereof not exceeding the aggregate principal amount of Bonds maturing in the year of maturity of the Fully Registered Bond for which the denomination is to be specified, in the case of Fully Registered Bonds coupon Bonds shall be numbered from one (1) consecutively upwards in order of maturity and the Fully Registered Bonds shall be lettered and numbered from (R1) consecutively upwards in order of issuance At the written direction of an Authorized Officer of the City "CUSIP" identification numbers shall be imprinted on the Bonds, but such numbers shall not constitute a part of the contract evidenced by the Bonds and any error or omission with respect thereto shall not constitute cause for refusal of any purchaser to accept delivery of and pay for the Bonds In addition, failure on the part of the City to use such CUSIP numbers in any notice to Holders of the Bonds shall not constitute an event of default nor a viola- tion of the City's contract with such Holders 206 Place of Payment. Security Pacific National Bank, Los Angeles, California The Bank of New York, New York New York, and Harris Trust and Savings Company Chicago, Illinois, are hereby appointed as Paying Agents Principal and Redemp- tion Price of and interest on coupon or bearer Bonds are payable at the corporate trust office of the Trustee in Los Angeles, California, or at the option of the Holder, at the office of any Paying Agent The principal and Redemption Price of the Fully Registered Bonds and of coupon Bonds registered as to principal only shall be payable only at the Principal Office of the Trustee, in Los Angeles, California Interest on Fully Registered Bonds is payable by check mailed to the registered owner 207 Conditions Precedent to Delivery of Bonds Except as provided in Sections 307, 310, 312 313 405 and 1106, the Trustee shall authenticate and deliver to the purchasers thereof the Bonds authorized to be issued pursuant to this Resolution but only upon receipt of the following (1) A copy of this Resolution and all Supplemen- tal Resolutions each certified by an Authorized Officer. (2) A Counsel's Opinion stating (i) that in the opinion of such counsel the Resolution and all Supple- mental Resolutions authorizing the Bonds have been duly -19- L 1 adopted by the City; (ii) that the Resolution is valid and binding upon the City and enforceable in accordance with its terms, (iii) that the Resolution creates a valid pledge of that which the Resolution purports to pledge, subject to the provisions of the Resolution, (such opinion may be qualified to the extent that the enforceability of the Resolution may be limited by bankruptcy, insolvency and other laws affect- ing the rights of creditors generally), and (iv) that the Trustee is duly authorized by the City to authen- ticate and deliver Bonds as identified and described in the Resolution and in said Counsel's Opinion, (3) An Officer's Certificate directing the Trustee to authenticate and deliver Bonds as authorized; and (4) A Certificate of Projected Pledged Revenues, giving effect to the issuance of Bonds, together with an Accountant's Certificate containing a verification of the arithmetical computations and demonstrations set forth in the Certificate of Projected Pledged Revenues 208 Sale of Bonds The Bonds authorized to be issued herein shall be sold to the purchasers on the terms and conditions set forth in the Bond Purchase Contract, which is hereby approved, and upon the basis of the representatiors therein set forth. The Mayor of the City and the City rler: are hereby authorized to execute the Bond Purchase Contract evidencing the acceptance thereof by the City, and to approve and insert into this Resolution and the Bonds the maturities and interest rates which the Bonds will bear and the price at which said Bonds shall be sold. 209 Delivery of Bonds The Bonds shall be delivered to the purchasers named in the Bond Purchase Contract, upon compliance with the provisions of Section 207 of this Resolu- tion, at such time and place as shall be determined by the City Manager of the City, subject to the provisions of the Bond Purchase Contract 210. Authority to Consummate Transaction. The Mayor of the City, the City Clerk, and other proper officers of the City are hereby authorized and directed to execute and deliver any and all papers and instruments and to do and cause to be done any and all acts and things necessary or proper for carrying out the transactions contemplated by this Resolution. -20- 247 248 ARTICLE III GENERAL TERMS AND PROVISIONS OF BONDS 301 Date of Bonds Each Bond shall be dated as of, and bear interest from, its Issue Date except as otherwise provided in Section 304 in the case of Fully Registered Bonds 302 Interest Payment Dates Interest on each Bond shall be payable semiannually on each January 1 and July 1 beginning January 1, 1981 303 Principal Installment Date The date when each Principal Installment with respect to a Bond is payable shall be any January 1 after its Issue Date 304. Medium of Payment, Form and Date. (A) The Bonds shall be payable, with respect to interest, principal and Redemption Price, in lawful money of the United States of America which at the time of payment is legal tender for the payment of public and private debts (B) The Bonds shall be issued in the form of coupon Bonds, registrable as to principal only, or in e'e form of Fully Registered Bonds without counons or in both such forms (C) Coupon Bonds shall be dated as of the Issue Date Coupon Bonds shall bear interest from their Issue Date, payable in accordance with, and upon surrender of, the appurtenant interest coupons as they severally mature Fully Registered Bonds issued prior to the first Interest Payment Date thereof shall be dated as of the Issue Date Fully Registered Bonds issued on or subsequent to the first Interest Payment Date thereof shall be dated as of the date six months preceding the Interest Payment Date next follow- ing the date of delivery thereof, unless such date of deli- very shall be an Interest Payment Date, in which case they shall be dated as of such date of delivery provided, how- ever, that if, as shown by the records of the Trustee, interest on the Bonds shall be in default, the Fully Regis- tered 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 Fully Registered Bonds shall bear interest from their date -21- 249 305. Legends The Bonds may contain or have endorsed thereon such provisions, specifications and descriptive words not inconsistent with the provisions of this Resolu- tion as may be necessary or desirable to comply with custom, or otherwise, as may be determined by the City prior to the delivery thereof 306 Execution and Authentication (A) The Bonds shall be executed in the name of the City by the manual or facsimile signature of its Mayor or Mayor Pro Tempore and its corporate seal (or a facsimile thereof) shall be thereunto affixed, imprinted, engraved or otherwise reproduced, and attested by the manual or facsi- mile signature of the City Clerk In case any one or more of the officers who shall have signed or sealed any of the Bonds shall cease to be such officer before the Bonds so signed and sealed shall have been actually delivered, such Bonds may, nevertheless, be delivered as herein provided, and may be issued as if the persons who signed or sealed such Bonds had not ceased to hold such offices Any Bond may be signed and sealed on behalf of the City by such persons as at the actual time of the execution of such Bond shall be duly authorized or hold the proper office in the City, although at the Issue Date of the Bonds such persons may not have been so authorized or have held such office (B) The coupons to be attached to t:'e coupon Bonds shall be signed by the facsimile signature of the City Clerk or in such other manner as may be required by law, and the City may adopt and use for that purpose the facsim- ile signature of any person or persons who shall have been City Clerk at any time on or after the date of adoption of the Resolution notwithstanding that such person may not have been such City Clerk at the date of any such Bond or may have ceased to be such City Clerk at the time when any such Bond shall be actually delivered (C) Only Bonds authenticated by the endorsement thereon of a certificate substantially in the form herein- after set forth and executed by an authorized officer of the Trustee shall be valid and become obligatory for any purpose under, be secured by, and be entitled to the benefits of, this Resolution; and every such certificate of the Trustee upon any Bond purporting to be secured hereby shall be conclusive evidence that the Bond so authenticated has been duly issued hereunder, and that the Holder is entitled to the benefits of this Resolution and to the benefit of the trust hereby created Before authenticating and delivering any coupon Bond hereunder, the Trustee shall remove and cancel any coupons thereon then matured except coupons in default -22- 250 307 Interchangeability of Bonds Coupon Bonds, upon surrender thereof at the Principal Office of the Trustee with all unmatured coupons attached (together with any matured coupons in default appertaining thereto), may at the option of the Holder thereof, be exchanged for an equal aggregate principal amount of Fully Registered Bonds of the same maturity and of any other authorized denominations Fully Registered Bonds, upon surrender thereof at the Principal Office of the Trustee with a written instru- ment of transfer satisfactory to the Trustee, duly executed by the registered owner or his attorney duly authorized in writing, may, at the option of the registered owner thereof, be exchanged for an equal aggregate principal amount of coupon Bonds of the same maturity with appropriate coupons attached, or of Fully Registered Bonds of the same maturity and of any other authorized denominations 308 Negotiability, Transfer and Registry All the Bonds issued under this Resolution shall be negotiable, subject to the provisions for registration and transfer contained in this Resolution and in the Bonds So long as any of the Bonds shall remain Outstanding, the Trustee shall maintain and keep, at its Principal Office, books for the registration and transfer of Bonds, and, upon presentation thereof for such purpose at said office, the Trustee shall register or cause to be registered therein, and permit to be transferred thereon, under such reasonable regulations as the City or the Trustee may prescribe, any Bond entitled to registration or transfer So long as any of the Bonds remain Outstanding, the City shall make all necessary provisions to permit the exchange of Bonds at the Principal Office of the Trustee 309 Transfer and Registration of Coupon Bonds (A) All coupon Bonds shall pass by delivery, unless registered as to principal other than to bearer in the manner provided in this Section 309 Any coupon Bond may be registered as to principal on the books at the Prin- cipal Office of the Trustee, upon presentation thereof at said office and the payment of a charge sufficient to reim- burse the City or the Trustee for any tax, fee or other governmental charge, required to be paid with respect to such registration, and such registration shall be noted on such Bond After said registration, no transfer thereof shall be valid unless made on said books by the registered owner in person or by his attorney duly authorized in writ- ing, and similarly noted on such Bond, but such Bond may be -23- Imo lbw 1 0,1 LI 251 discharged from registration by being in like manner trans- ferred to bearer, after which it shall again become trans- ferrable by delivery Thereafter such Bond may again, from time to time, be registered or discharged from registration in the same manner Registration of any coupon Bond as to principal, however, shall not affect the negotiability by delivery of the coupons appertaining to such Bond, but every such coupon shall continue to pass by delivery and shall remain payable to bearer. (B) As to any coupon Bond registered as to prin- cipal other than to bearer, the person in whose name the same shall be registered upon the books of the Trustee may be deemed and regarded as the absolute owner thereof, whether such Bond shall be overdue or not, for all purposes, except for the purpose of receiving payment of coupons; and payment of, or on account of, the principal or Redemption Price, if any, of such Bond shall be made only to, or upon the order of, such registered owner thereof, but such registration may be changed as above provided All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid. The Trustee and any Paying Agent may treat the bearer of any coupon as the absolute owner thereof, whether such coupon shall be overdue or not, for the purpose of receiving pay- ment thereof and for all other purposes whatsoever, and may treat the bearer of any coupon Bond which shall not at t -ie time be registered as to principal other than to bearer, or the person in whose name any coupon Bond for the time being shall be registered upon the books of the Trustee, as the absolute owner of such Bonds, whether such Bond shall be overdue or not, for the purpose of receiving payment of the principal or Redemption Price thereof and for all other pur- poses whatsoever except for the purpose of receiving payment of coupons, and neither the City nor the Trustee nor any Paying Agent shall be affected by any notice to the contrary The City agrees to indemnify and save the Trustee and each Paying Agent harmless from and against any and all loss, cost, charge, expense, judgment or liability incurred by the Trustee and each Paying Agent, acting in good faith and without negligence hereunder, in so treating such bearer or registered owner 310 Transfer of Fully Registered Bonds (A) Each Fully Registered Bond shall be transfer- able only upon the books of the Trustee, which shall be ,sept for such purpose at the Principal Office of the Trustee, by -24- 252 the registered owner thereof in person or by his attorney duly authorized in writing, upon surrender thereof together with a written instrument of transfer satisfactory to the Trustee duly executed by the registered owner or his duly authorized attorney Upon the transfer of any such Fully Registered Bond, the Trustee shall issue in the name of the transferee a new Fully Registered Bond or Bonds or, at the option of the transferee, coupon Bonds, with appropriate coupons attached, of the same aggregate principal amount anc maturity as the surrendered Bonds (B) The Trustee may deem and treat the person in whose name any outstanding Fully Registered Bond shall be registered upon the books of the Trustee as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal, or Redemption Price, if any, of and interest on such Bond and for all other purposes, and all such payments so made to any such registered owner or upon his order shall be valid and effectual to satisfy and dis- charge the liability upon such Bond to the extent of the sum or sums so paid, and neither the City nor the Trustee shall be affected by any notice to the contrary The City agrees to indemnify and save the Trustee harmless from and against any and all loss, cost, charge, expense, judgment or liability incurred by it, acting in good faith and without negligence hereunder, in so treating such registered owner. 311 Regulations with Respect to Exchanges and Transfers. In all cases in which the privilege of exchanging Bonds or transferring Fully Registered Bonds is exercised, the City shall execute and the Trustee shall authenticate and deliver Bonds in accordance with the provisions of this Resolution All Fully Registered Bonds surrendered in any such exchanges or transfers shall forthwith be cancelled by the Trustee All coupon Bonds and the coupons appertaining to such Bonds surrendered in any such exchanges or transfers shall be retained in the possession of the Trustee for the purpose of reissuanue upon subsequent exchanges and the Trustee, prior to reissuance of any such coupon Bonds, shall detach there- from and cancel all matured coupons (other than matured coupons in default, if any) For every such exchange or transfer of Bonds, whether temporary or definitive, the City or the Trustee may make a charge sufficient to reimburse it for any tax, fee or other governmental charge required to be paid with respect to such exchange or transfer, (other than such as may have been imposed by the City) and, after the first such exchange or transfer, to cover the costs of preparing each new coupon Bond or Fully Registered Bond and other expenses of the City or Trustee incurred in connection therewith, which sum or sums shall be paid by the person requesting such exchange or transfer as a condition precedent -25- 1 1 to the exercise of the privilege of making such exchange or transfer Notwithstanding any other provision of this Resolution, the cost of preparing each new coupon Bond or Fully Registered Bond upon the first exchange or transfer, and any other expenses of the City or the Trustee incurred in connection therewith (except any applicable tax, fee or other governmental charge), shall be paid by the City The Trustee shall not be obliged to make any such exchange or transfer of Bonds during the fifteen (15) days next pre- ceding an Interest Payment Date on the Bonds, or, in the case of any proposed redemption of Bonds, next preceding the date of the first publication of notice of such redemption 312 Bonds Mutilated, Destroyed, Stolen or Lost In case any Bond shall become mutilated or be destroyed, stolen or lost, the City shall execute and the Trustee shall authenticate and deliver a new Bond (with appropriate cou- pons attached in the case of coupon Bonds) of like maturity and principal amount as the Bond and attached coupons, if any, so mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Bond, upon surrender and cancellation of such mutilated Bond and attached coupons, if any, or in lieu of and substitution for the Bond and cou- pons, if any, destroyed, stolen or lost, upon filing with the City and the Trustee evidence satisfactory to the City and the Trustee that such Bond and attached coupons, if any, have been destroyed, stolen or lost and proof of ownership thereof, and upon furnishing the City and the Trustee with indemnity satisfactory to both (provided, how- ever, so long as The Aetna Casualty and Surety Company or any of its affiliates own any of the Bonds a letter of in- demnification of said Company or any of its affiliates shall be satisfactory) and complying with such other reasonable regulations as the City and the Trustee may prescribe and paying such expenses as the City and the Trustee may incur. All Bonds and coupons so surrendered to the Trustee shall be cancelled by it. 313 Preparation of Definitive Bonds, Temporary Bonds The definitive Bonds shall be lithographed or printed on steel engraved borders Until the definitive Bonds are prepared, the City may execute, in the same manner as is provided in Section 306, and the Trustee may authenticate and deliver, in lieu of definitive Bonds, but subject to the same provisions, limitations and conditions as the defini- tive coupon Bonds, except as to the denominations thereof and as to exchangeability for Fully Registered Bonds, one or more temporary Bonds (which may be registrable as to prin- cipal and interest), substantially of the tenor of the definitive coupon Bonds in lieu of which such temporary Bond -26- • 253; 0 254 or Bonds are issued, but with or without coupons, in denom- inations of $5,000 or any integral multiples thereof auth- orized by the City, and with such omissions, insertions and variations as may be appropriate to temporary Bonds The installments of interest payable on such temporary Bonds in bearer form shall be payable only upon the presentation and surrender of the coupons therefor attached thereto or, if no coupons for such interest are attached, then only upon presentation of such temporary Bonds for notation thereon o= the payment of such interest The City at its own expense shall prepare and execute and the Trustee upon the surrender of such temporary Bonds, with all unmatured coupons, and all matured coupons for which no payment or only partial payment has been provided, attached, for exchange and the cancella- tion of such surrendered temporary Bonds and coupons, without charge to the Holder thereof, shall authenticate and deliver in exchange therefor, at the Principal Office of the Trustee, definitive coupon Bonds, with appropriate coupons attached, or, at the option of the Holder, definitive Fully Registered Bonds of the same aggregate principal amount and maturity as the temporary Bonds surrendered Until so exchanged, the temporary Bonds shall in all respects be entitled to the same benefits and security as definitive Bonds issued pur- suant to this Resolution. All temporary Bonds surrendered in exchange for a definitive Bonds or Bonds shall be forthwith cancelled by the Trustee ARTICLE IV REDEMPTION OF BONDS Igo 255 401 Privilege of Redemption and Redemption Price (A) The Bonds are subject to special mandatory redemption prior to maturity pursuant to subsection (3) (ii) optional redemption prior to maturity pursuant to subsection (C) and (iii) mandatory redemption prior to maturity pursuant to subsection (D) (B) The Bonds are subject to special mandatory redemption in whole or in part on any Interest Payment Date commencing January 1, 1983, and thereafter to the extent necessary to meet and maintain the Asset Coverage Test, at a Redemption Price equal to one hundred percent (100%) of the principal amount thereof plus accrued interest to the date of redemption, without premium, from and to the extent there (i) are moneys in the Mortgage Loan Purchase Account which have not been applied to the purchase of Mortgage Loans as provided in Section 504(E) and (F), and (ii) moneys in the Residual Fund. If at any time on or after January 1, 1990 the sum of moneys (or investments which, when liquidated will produce moneys) in the Debt Service Reserve Fund, Mortgage Reserve Fund, Principal Fund, Interest Fund, Sink- ing Fund, Prior Redemption Fund, and Residual Fund equals or exceeds the applicable redemption prices of the then out- standing Bonds, plus unpaid accrued interest to the redemp- tion date, the Bonds shall be redeemed from such moneys on any date in whole at the applicable redemption price set forth in the table in subsection (C) plus accrued interest to the redemption date (C) The Bonds maturing on and after January 1, 1991, shall be subject to redemption at the option of the City, from any source of available funds, either as a whole on any date on or after January 1, 1990, or in part, pro rata by maturity as hereinafter provided, and by lot within a maturity, on any Interest Payment Date on or after January 1, 1990, and prior to their respective maturities, upon notice as herein provided and when so redeemed in any period shown in the following table, at the respective Redemption Prices (expressed as percentages of the principal amount of such Bonds to be so redeemed) set opposite such period in said table, plus accrued interest to the redemption date Period Redemption (Both Dates Inclusive) Prices January 1, 1990 to December 31, 1992 January 1, 1993 to December 31 1995 January 1, 1996 to December 31, 1998 January 1, 1999 and thereafter -28- 103% 102% 101% 100% 256 Bonds subject to special mandatory redemption in part under subsection (B) and optional redemption in part under subsection (C) shall be called for redemption pro rata by maturity, as follows. In the event the Bonds are to be redeemed in Dart, the Bonds shall he selected and redeemed on a reasonably proportionate basis from among all the then outstand+.ng maturities of the Bonds (and by lot within a maturity), si h basis to be determined and effectuated as nearly as prac- ticable by the City by selecting from each such maturity an amount equal to the result obtained by multiplying the total amount of moneys to be available to redeem Bonds on the redemption date by the ratio which the principal amount of all Bonds Outstanding in each such maturity (including Sinking Fund Installments as the maturities for Term Bonds) bears to the principal amount of all Outstanding Bonds, provided that Bonds shall be redeemed only in multiples of five thousand dollars ($5,000). Any amount in excess of the five thousand dollar ($5,000) multiple remaining after such redemption shall be retained in the Residual Fund (D) The Term Bonds shall be subject to redemption in part by lot by operation of Sinking Fund Installments as provided in Article VI of this Resolution, upon notice as herein provided, on January 1, 1996, and on each Janwar. 1 thereafter to and including January 1, 2012, all as herein provided, a' -d in each case at the Redemption ?rice equal to the principal amount of each Bond or portion thereof to be redeemed, together with accrued interest to the date of redemption, without premium. Unless none of the Term Bonds shall then be Outstanding, the City shall be required to pay on January 1 of each year set forth in the following table, for the retirement of the Term Bonds, the amount set oppo- site such year of said table, and the same amount so to be paid on each such date is hereby established as and shall constitute a Sinking Fund Installment for retirement of the Term Bonds; provided, however, that if prior to each date on which a Sinking Fund Installment is due any Term Bonds have been purchased or redeemed from moneys in the Prior Redemp- tion Fund, the amount of each future Sinking Fund Install- ment shown will be reduced in $5,000 increments, by the amount obtained by multiplying the principal amount of Term Bonds so called for redemption by the ratio which each Sinking Fund Installment then bears to the total of all Sinking Fund Installments -29- Sinking Fund Installments shall be made with respect to the Term Bonds as follows: Year 1996 1997 1998 1999 2000 2001 2002 2003 2004 Amount 555,000 605,000 660,000 720,000 785,000 855,000 935,000 1,015,000 1,110,000 Year 2005 2006 2007 2008 2009 2010 2011 2012 (maturity) _11}r' �» 257 _.mount 1,210 000 1 315,000 n(/(�� /( , 4 3 .0 , 0 0 0 1,565,000 1,705,000 1,860,000 2,025,000 2,210,000 (E) Bonds subject to redemption prior to maturity shall be redeemable prior to maturity, (a) (i) upon receipt by the Trustee (in the case of Bonds subject to optional redemption pursuant to subsection (C)) of the Officer's Certificate referred to in Section 606 or (ii) under the cir- cumstances set forth in Section 605, and (b) upon published notice as provided in this Article IV, at such times, at such Redemption Prices and upon the terms herein set forth 402 Selection of Bonds to be Redeemed by Lot In the event of redemption by lot of Bonds of like maturit' the Trustee shall assign to each Fully Registered Bond of such maturity then Outstanding a distinctive number for each S5 000 of the principal amount of such Bond and shall select by lot, using such method of selection as it shall deem proper in its discretion and from the numbers of all coupon Bonds of such maturity of the denomination of $5,000 then Outstanding and the numbers so assigned to such Fully Registered Bonds, as many numbers as, at $5,000 for each number, shall equal the principal amount of such Bonds to be redeemed. The Bonds to be redeemed shall be the coupon Bonds of the denom- ination of $5,000 bearing the numbers so selected, and the Fully Registered Bonds to which were assigned numbers so selected, but only so much of the principal amount of each such Fully Registered Bond of a denomination of more than $5,000 shall be redeemed as shall equal $5,000 for each number assigned to it and so selected. For the purposes of this Section, Bonds which have theretofore been selected by lot for redemption shall not be deemed Outstanding 403. Notice of Redemption When the Trustee shall be required or authorized, or shall receive notice from the City of its election, to redeem Bonds, the Trustee shall in accordance with the terms and provisions of the Bonds and of this Resolution select the Bonds to be redeemed and shall -30- 258give notice, in the name of the City, of the redemption of Bonds, which notice shall specify the maturities of the Bonds to be redeemed, the redemption date and the olace or places where amounts due upon such redemption will be pay- able and, if less than all of the Bonds of any lice maturity are to be redeemed, the letters and numbers or other distin- guishing marks of such Bonds so to be redeemed, arid, in the case of a Fully Registered Bonds to be redeemed in part only, such notice shall also specify the portion of the principal amount thereof to be redeemed Such notice shall further state that on such date there shall become due and payable upon each Bond to be redeemed the Redemption Price thereof, or the Redemption Price of the specified portion of the principal thereof in the case of a Fully Registered Bond to be redeemed in part only, together with interest accrued to such date, and that from and after such date interest thereon shall cease to accrue and be payable Such notice shall be given by publication thereof in Authorized News- papers, at least once, not less than twenty-five (25) days nor more than sixty (60) days prior to such redemption date The Trustee shall also mail a copy of such notice, postage prepaid, not less than twenty (20) days nor more than sixty (60) days prior to such redemption date, to the registered owner of any Bond, all or a portion of which is to be re- deemed, at his last address, if any, appearing upon t'le registry books, and the Holders of Bonds in bearer for: ,a',o 'lave filed an address and the number or numbers of t',eir respective Bonds with the Trustee pursuant to Section 1104, but such mailing shall not be a condition precedent to such redemption and failure so to mail any such notice shall not affect the validity of any proceedings for the redemption of Bonds 404 City's Election to Redeem. The City shall give written notice to the Trustee of its election to redeem Bonds which are subject to optional redemption and of the redemption date, which notice shall he given at least forty days (40) prior to the redemption date or at such later date as shall be acceptable to the Trustee In the event that the required notice of redemption shall have been given, the City shall, and hereby covenants that it will, prior to the redemption date, pay to the Trustee an amount in cash which, in addition to any other moneys available therefor held by the Trustee, will be sufficient to redeem at the Redemption Price thereof, plus interest accrued to the redemption date, all of the Bonds which are to be redeemed -31- 405 Payment of Redeemed Bonds Notice having been given by publication in the manner provided in Section 403, the Bonds or portions thereof called for redemption and specified in said notice shall become due and payable or `'re redemption date specified in said notice at the Redemption Prices thereof applicable on such date, plus unpaid interest on said Bonds or portions thereof accrued to such date a -d, upon presentation and surrender thereof at tie place Jr places specified in said notice together with, in t}e case of Bonds registered otherwise than to bearer, a written instrument of transfer duly executed by the registered owner thereof or by his attorney duly authorized in writing, and, in the case of coupon Bonds, all appurtenant coupons matur- ing subsequent to such date, said Bonds or portions thereof shall be paid at the said Redemption Prices plus unpaid interest on said Bonds or portions thereof accrued to such date not represented by coupons for matured interest install- ments All interest represented by coupons which shall have matured at or prior to such redemption date shall continue to be payable to the bearers of such coupons If there shall be so called for redemption less than all of a Fully Registered Bond, the City shall execute and the Trustee shall authenticate and deliver upon the surrender of such Bond to the Trustee, without charge to t^e owner thereof, for the unredeemed balance of the principal amount of t''e Fully Registered 3ond so surrendered, at '-'e op-ior of 'e owner thereof either coupon Bonds or registered Bonds of lire designation, interest rate and maturity in any of the aut'rorized denominations However, rotwithstanding anz other provision of this Resolution, the Trustee and any owner of a Fully Registered Bond or Bonds may agree on procedure satis- factory to such parties to indicate proper denomination of such Fully Registered Bond or Bonds subsequent to a partial redemption thereof so that such owner is not required to surrender such Fully Registered Bond or Bonds in exchange for a new Fully Registered Bond of proper denomination If, on such redemption date, moneys for the redemption of all the Bonds or portions thereof of any like maturity to be redeemed, together with interest thereon accrued and unpaid to such date, shall be held by or behalf of the Trustee so as to be available therefor on such date and if notice of redemption thereof shall have been published as aforesaid, then from and after such redemption date interest on the Bonds or portions thereof of such maturity so called for redemption shall cease to accrue and become payable, and the coupons for interest appertaining thereto maturing subse- quent to such redemption date shall be void and said Bonds and coupons shall no longer be considered as Outstanding hereunder All moneys held by or on behalf of the Trustee for the redemption of particular Bonds shall be held in trust for the account of the Holders of the Bonds so to be redeemed -32- 1 *6O ARTICLE V ESTABLISHMENT OF FUNDS AND ACCOUNTS; APPLICATION OF BOND PROCEEDS AND O 'HER LIONEYS 501 Establishment of Funds and Accounts The City hereby establishes and creates t:7e following =un•ds and Accounts which shall be special fads he'd by t~e ^rustse• A Bond Proceeds Fund 1 Issuance Expense account 2 ;Mortgage Loan Purchase Account B Revenue Fund C Operating Fund D Interest Fund E. Principal Fund F Sinking Fund G Prior Redemption Fund H Mortgage Reserve Fund I Debt Service Reserve Fund J Residual Fund No amounts may be withdrawn, transferred or paid out of ary of the above Funds or Accounts except as orov..ded ir. this Article or ir Article VI or VII hereof 502 Deposit of Bond Proceeds and Cor rni tmert Fees proceeds from the sale of the Bonds shall be deoos.ted with the Trustee on the date of delivery of the Bonds in the Bond Proceeds Fund and credited in the following amounts to the following Funds and Accounts created pursuant to Section 501 hereof (a) To the Debt Service Reserve Fund, an amount of money that equals (or if directed by a certificate of an Authorized Officer, exceeds) the Debt Service Reserve Requirement; (b) To the Interest Fund, the amount, if any, of interest accrued on the Bonds from January 1, 1980 to their date of delivery (c) To the Mortgage Reserve Fund, an amount of money specified by an Officer's Certificate, but not more than the Mortgage Reserve Requirement, (d) To the Issuance Expense Account, the amount, if any, allocated to said Fund by a certificate of an Authorized Officer; and -33- 1 (e) To the Mortgage Loan Purchase Account, the remainder of the Bond Proceeds In addition, all moneys paid as commitment fees by uali=ied Mortgage Lenders pursuant to the Mortgage Loan Purchase Agree- ments (reoresentina in the aggregate an amount ecual to ore _.,ercent 11 ) of the principal amount of ortgaae uoa':s c: -- mi -ted to be made by the i L.ali` ed t tg erders) ' 1 1 L a ..L ..O l .�. �J �.. a .� � J .�. � .'mow oe deposited with the ''rustee and credited to the .iortcage Loan Purchase Account 503 Application of Issuance Expense Account The Trustee shall apply the moneys in the Issuance Expense Account to the payment of Costs of Issuance Such Costs of Issuance shall be paid by the Trustee upon receipt by the Trustee of Requisitions identifying (i) the amount to be paid, (ii) the payee, (iii) the service rendered or other basis for the obligation to pay, and (iv) the date on which payment is to be made Upon receipt of an Officers Certi- ficate stating that all of the Costs of Issuance have been paid, the Trustee shall transfer any moneys remaining in said account to the Mortgage Loan Purchase Account 504 Aoolication of 'Iortaaae Loan Purchase Account (A) Except as otherwise provided in this Resolu- tion for transfers to other Funds and Accounts, mo^evs in the :Mortgage Loan Purchase Account shall be used solely or the purchase of ;Mortgage Loans However, no ::ortcage oars shall be purchased prior to April 1, 1980 and not more than fifty percent (50%) of the original amount of the 'Mortgage Loan Purchase Account shall be used to purchase `Iortgage Loans prior to June 1, 1980 The use of moneys in the '4ort- gage Loan Purchase Account shall be subject to the following additional restrictions - (1) No Mortgage Loan shall exceed ninety-five percent (95%) of the value of the Residence; (2) Not more than twenty percent (20%) of the original amount of the Mortgage Loan Purchase Account shall be used to purchase Mortgage Loans which exceed ninety percent (90%) of the value of the Residence. (3) No Mortgage Loan larger than $65 000 shall exceed ninety percent (90%) of the value of the Residence; (4) No Mortgage Loan larger than $85 000 shall exceed eighty percent (80%) of the value of the Residence; and (5) Not more than twenty percent (20%) of the original amount of the Mortgage Loan Purchase Account shall be used to purchase Mortgage Loans for Financing the acquisition of Condominium Units -34- 3L 261 t 262 "The value of the Residence" as used in this Section means the lesser of (i) the appraised value of the Residence at the time the Mortgage Loan is closed, or (ii) the purchase price paid for the Residence by the 'lortgacror (3) (1) Prior to the purchase of any Aortgage Loan for the purpose of Financing a Condominium Uric Trustee shall have receiJed copies of the declaration c ,covenants, conditions and restrictions applicable to t' -'e development of which the Condominium Unit is a part iherebv the homeowner's association is obligated to obtain and continue in effect for the full period during which any 3onds are Outstanding hereunder, a master or blanket policy of hazard insurance• provided, however, that if such hazard policy does not meet the criteria established for Hazard Insurance hereunder, the Trustee shall require evidence of Difference in Conditions coverage as specified irl clause (iii) of the definition of Hazard Insurance set forth in Section 103 Such declaration shall provide that all policies of insurance maintained in accordance therewith shall contain a provision that said policy or policies shall not be cancelled or terminated, or permitted to expire by their terms, without thirty (30) days prior written notice to the Trustee and the Servicer Upon receipt of such notice, t' -ie Trustee shall take such action as it :'eems appropriate to cause such policy or policies of insurance not to be cancelled, terminated or expire r per-:itted to e• re an. 4 may to the extent necessary cause any premiums to be advanced and paid by the City through operation of the Operating Fund (2) Prior to the purchase of any Mortgage Loan, the Trustee shall have been given evidence that the City has taken out or made irrevocable arrangements for a policy of Special Hazard Insurance (C) With respect to the purchase of eac'i Mortgace Loan, after receipt by the Trustee of (1) A Requisition identifying (i) the ?Mort- gagor, the Mortgage and the Residence subject to the lien of the Mortgage, (ii) the amount of such payment, and (iii) the Qualified Mortgage Lender to whom payment is to be made for the purchase of the Mortgage Loan pursuant to a Mortgage Loan Purchase Agreement - (2) The original promissory note secured by the lien of the Mortgage identified in the Requisition duly executed by the Mortgagor and endorsed by the Qualified Mortgage Lender to the Trustee, on behalf of the City, and the originals or certified copies of the fully executed Aortgage (deed of trust) and of the duly acknowledged assign- ment of such Mortgage executed by the Qualified Mortgage -35- 263 Lender to the Trustee, on behalf of the City, such Mortgage and assignment to be either (i) duly recorded in the office of the County Recorder, as evidenced by a document stamped of record or by certification of the escrow co:oany or title company, or (ii) accompanied by irrevocable instructions of the Qualified Mortgage Lender author zing the escrow company or title comoanv so to record the assignment upon payment to the :Qualified rlortgace Lender of the purchase ;rice of tie .ortgage Loan; ` (3) A Private Mortgage Insurance certificate duly endorsed and stating that the Mortgage Loan is, or a firm commitment assuring that payment of the '••lortgage Loan dill be, insured, in whole or in part, by a Private 'qortgage Insurer; (4) A current American Land Title Associa- tion mortgage title insurance policy, containing unmodified endorsements 100 and 116 duly assigned to the Trustee by the terms of such policy or by endorsement of the title in- surance company or the irrevocable agreement of the title company to so endorse such assignment for the benefit of the Trustee, on behalf of the City, insuring title to the mortgaged Residence as being vested in the Mortgagor subject only to the lien of the Mortgage and Permitted Encumbrances, iJ .. V and issued in the face amount of the Mortgage Loan by a reputable title insurance company or, in lieu of the fore- going described policy of mortgage title insurance, a pre- liminary title report and irrevocable instructions to t'^e escrow agent not to close the Mortgage Loan with tre lort- gagor until a reputable title insurance company is able to and will issue the foregoing described policy of mortgage Ft title insurance, duly assigned by the terms of such policy or by endorsement of the title insurance company; the Qualified Mortgage Lender shall instruct the escrow company to cause the original mortgage title insurance policy to be delivered, when available, timely to the Trustee and (5) A copy of the policy or policies of insurance which provide Hazard Insurance, or appropriate endorsement(s) or binder(s) of such insurance, on the Residence subject to the lien of the Mortgage, insuring the Trustee, the City and any other parties in interest as their interests may appear; the Trustee shall pay and disburse from the Mortgage Loan Purchase Account to the Qualified Mortgage Lender identified in the Requisition the amount set forth in the Requisition such payment to be made prior to the close of business of the week next following the week within which the foregoing were received by the Trustee. So long as the Trustee shall have no actual knowledge to the contrary the Trustee shall not be obligated to determine whether (i) such Mortgage Loan -36- ;, 264 ! conforms to any other criterion of eligibility, whether set forth in this Resolution, the Mortgage Loan Purchase Agree- ment, or elsewhere (ii) the issuer of any policy of in- surance is reputable or qualified to issue such policy, or (iii) any policy of insurance is sufficient in form or amount The Trustee shall keep and maintain accurate rPcor s of all such '!ortcace Loan purchases _nc.ludi c therein a descr_ption of the lortgage Loans purchased, the purchase price of such Mortgace Loans and the Qualified !ortgage Lenders from whom such Mortgage Loans .'ere pur- chased. The Trustee shall give notice of any such purchase of any Mortgage Loan to the Private Mortgage Insurer (if required by the Private Mortgage Insurer) and to such other persons as may be entitled to such notice by law or by the terms of the Mortgage Loan, within thirty (30) days of the purchase or such earlier time as may be required (D) The Qualified Mortgage Lender shall cause each Mortgage Loan to be executed so as to bear an annual interest rate as provided in Section 911(F) hereof (E) On or about October 1, 1932, the Tr'..stee s'nall determine whet''er the amount of 2ond proceeds on deposit in the Uortgage Lcan Purchase Account, e:.c.�usiae o_ interest earned thereon, is in excess of fifteen percent (15%) of the amount of Bond proceeds originally deposited therein pursuant to Section 501 If such be the case, the Trustee shall, no later than November 1, 1982 transfer the balance to the Prior Redemption Fund and apply such excess amount of Bond proceeds to the purchase or special mandatory redemption of Bonds, such purchase or redemption to be completed no later than January 1, 1983 The City reserves the right to determine that January 1, 1984, rather than January 1, 1983, shall be the date by which Bond proceeds in the Mortgage Loan Purchase Account shall have been so transferred and applied to the purchase or redemption of Bonds, such determination to be based upon (i) the fact that 85% of the original Bond proceeds deposited in the Mortgage Loan Purchase Account has been applied to the purchase of Mortgage Loans and (ii) the City has obtained a nationally recognized bond counsel's opinion that the determination to extend the date to January 1 1984, 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 The City's determination to so extend the date to January 1, 1984, shall be set forth in an Officer's -37- 1 PidS 265 Certificate and a Certificate of Projected Pledged Revenues delivered to the Trustee on or before November 1, 1982, or such later date as shall be acceptable to the Trustee (F) Any amounts in the Mortgage Loan Purchase Account on January 1, 1984, shall be transferred to the prior Redemption Fund and applied to the special -iardator•; redemption of Bonds (G) Notwithstanding any of the foregoing provi- sions of this Section, the Trustee shall transfer from the ortgage Loan Purchase Account, for deposit in the Principal Fund any amounts necessary for the payment, when due, of Principal Installments of Bonds as provided in Article VI (H) All actions of the Trustee in the purchasi-,g of Mortgage Loans under this Section shall be accomplished by the Trustee in its capacity as Trustee acting on behalf of the City and the Bondholders under this Resolution and as mortgagee of record under the Mortgage Loans 505 Qualified Mortgage Lender Trust Accounts A Temporary Account designated as the "(Name of Qualified Mortgage Lender) mrust Account", is established for the uurpose of 'holding cash on behalf of each Qualified `ortaace Lender Such cash will be delivered to the Trustee pur- suant to a r!ortgaae Loan Purc'zase Acreement among the C:t Securiti Pacific National Bank as Trustee, and the Qualified 'ortgage Lender In addition to holding such cash, a -y moneys received by the Trustee pursuant to the further provisions of such Mortgage Loan Purchase Agreement shall be deposited in the Qualified Mortgage Lender's Trust Account Moneys deposited therein (exclusive of investment income earned thereon) shall be applied as provided in Section 507 The Trustee may commingle the moneys held in such accounts for the purpose of investing such moneys. 506. Investment Income Earned on Temporary Accounts Investment income, if any, earned on moneys deposited in the Temporary Accounts established herein shall be paid by the Trustee immediately after the end of each calendar quarter to each Qualified Mortgage Lender, or its successors and assigns 507 Termination of a Temporary Account. A Temporary Account herein established shall terminate upon the happen- ing of the earlier of either of the following conditions (a) Upon the Qualified Mortgage Lender's delivery of the principal amount of Mortgage Loans required by t: -'e Mortgage Loan Purchase Agreement, the Trustee shall deliver the balance therein free and clear of the lien of this Resolution and the applicable Temporary Account shall terminate; or -38- 266 (b) Upon termination of the commitment period on October 31, 1982 (or October 31, 1983, if the City has extended said date pursuant to Section 504(:)) the Trustee shall transfer to the Residual Fund the Termination Fee (,f any) provided for in the Aortgage Loan Purchase Agreements and shall return the balance in the applicable Temporary .yccounts to the respective Qualified Mortgage Lenders• a -d ie applicable Temporary Accounts shall terminate 508 Trustee Reliance on Documents The Trustee may exclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon all Requisitions, certificates or other documents furnished to the Trustee pursuant to this Article and believed by the Trustee to be genuine All such Mortgages, Notes, Requisi- tions, certificates and other documents shall be retained in the possession of the Trustee, subject at all times during normal business hours to the inspection of the City The Trustee has no responsibility or liability for, and the City assumes all responsibility and liability for, the correct- ness, validity and genuineness of any such Requisition certificate or other document believed by the Trustee to be genuine valid and correct 509 Quarterly Reports. The mrustee shall provide t''e City and The Aetna Casualty and Surety Company, for so 1crg as "he Aet-a Casualty and Surety Company is the registeredr owner of any of the Bonds, with quarterly reports ccnr~erc- ing with the period ending three months after the Issue Daze of the Bonds, and continuing for as long as there are moneys in the Mortgage Loan Purchase Account, stating all receipts paid into and all disbursements made from said Fund pursuant to the provisions of this Article Such reports shall be mailed by the Trustee to the City and The Aetna Casualty and Surety Company pin iftw 1 ARTICLE VI APPLICATION OF REVENUES AND OTHER MONEYS 601 Pledge of Revenues, 'iortgace Insurance rcceeds, Mortaaces and Funds and Accounts; Nature cf Obligation (A) Subject only to the prior lien of t':e-r._stee established by Section 807, all of the Pledged Revenues, all Mortgage Loans purchased pursuant to this Resolution and all Funds and Accounts held by the Trustee under the provisions of this Resolution are hereby pledged to secure the payment of the principal or Redemption Price of and interest on the Bonds The pledge hereby made shall be valid and binding from and after the time of the delivery by the City of the first Bond delivered under this Resolution The Pledged Revenues, Mortgage Loans and Funds and Accounts so pledged and then or thereafter received by the Trustee or any Mort- gage Lender or Servicer shall immediately be subject to the lien of such pledge without any physical delivery or further act, and the lien of such pledge and the obligation to perform the contractual provisions hereby made shall have the priority over any or all other obligations and liabil- ities of the City, and the lien of such oledge shall be valid and binding as against all parties havi-^c claims of any kind in tort, contract or otherwise acainst t -e City irrespective of whether such parties have notice thereoT In no event shall the pledge of any Mortgage Loan be affect- ed by the circumstance that subsequent to the acquisition thereof it is determined, or it comes to be the case, that such Mortgage Loan was not eligible for purchase or making by the City under the Ordinance or the Resolution (B) The Bonds shall not be deemed to constitute a debt or liability of the City nor a pledge of the faith and credit of the City but shall be special obligations of the City payable solely from the Revenue Fund and the other Funds and Accounts herein provided The issuance of Bonds under this Resolution shall not directly, indirectly, or contingently obligate the City to levy or to pledge any form of taxation whatever therefor or to make any appropriation for their payment �► (C) Nothing in this Section shall be construed to prevent the City from applying moneys in the various Funds and Accounts in the manner provided in this Resolution -40- q267 6 602 Deposit of Pledged Revenues and Escrow Payments (A) All Pledged Revenues collected by the City or by any of its Servicers pursuant to a Serricirg Agreement shall be deposited with the Trustee. Unless otherwise pro- vided in this Resolution (such as in Section 911(H)), all decosits of Pledged Revenues shall be credi--ed to the -y e renue Fund (3) All Escrow Payments shall be paid to the Servicer for deposit in the appropriate Escrow Account for application in accordance with the Servicing Agreement (C) In the event that the Trustee receives a sin- gle payment which it knows to combine Revenues and Escrow Payments, the Trustee shall transmit that portion of the payment representing an Escrow Payment to the Servicer for deposit in the appropriate escrow payment account 603 Administration of Revenue Fund The Revenue Fund shall be administered and transfers and disbursements made therefrom in the manner, in the order and with the priority progressively set forth in subsections (A) to (G), inclu- sive, of this Section (A) On the first day of eac'l calendar Tort'- ccm- mercing on the first day of the month next succeeding _ne curchase of the first Mortgage Loan by the Trustee, the Trustee shall transfer $1,500 from the Revenue Fund to the Operating Fund (B) On the first day of each calendar month commencing twelve (12) months prior to the first Interest Payment Date, the Trustee shall transfer from the Revenue Fund to the Interest Fund an amount equal to one -twelfth (1/12th) of the Interest Requirement payable on the first Interest Payment Date and thereafter the Trustee shall transfer from the Revenue Fund to the Interest Fund an amount equal to one-sixth (1/6th) of the Interest Require- ment payable on the next succeeding Interest Payment Date (C) On the first day of each calendar month com- mencing twelve (12) months prior to the first Principal In- stallment Date, the Trustee shall transfer from the Revenue Fund to the Principal Fund an amount equal to one -twelfth (1/12th) of the amount by which the Principal Installment payable on the next succeeding Principal Installment Date exceeds the aggregate amount of Sinking Fund Installments required to be made on such date -41- (D) On the first day of each calendar month, commencing thirteen (13) months prior to the date on which the first Sinking Fund Installment is required to be made, the Trustee shall transfer from the Revenue Fund `o t -'e Sinking Fund an amount equal to one -twelfth (12::') of the aggregate amount of the Sinking Fund Installments payable or ..he Principal Installment Date •.a'^. -;.z _s less the,. fo irteer and more tai ore r.ont'z after such daz. (E) After making the foregoing alloca_ons and transfers, if the balance in the Mortgage Reserve Furd is less than the Mortgage Reserve Requirement, the deficiency shall be restored from available funds in the Reverue Fund (F) After making the foregoing allocations and transfers, if the balance in the Debt Service Reserve Fund is less than the Debt Service Reserve Requirement, the deficiency shall be restored from available funds in the Revenue Fund (G) Any surpluses remaining in the Revenue Fund after making the allocations and transfers provided for in the preceding subsections shall be transferred to the Re- sidual Fund 604 Aoolication of I^serest and ?_i^cA.oa1 =',.,nds (A) The Trustee shall git'^draw from t"e I-terest Fund, prior to each Interest Payment Date ar amount equal to the Interest Requirement payable on such Interest Dayment Date, and shall cause the same to be applied to the payment of said interest when due and is hereby authorized to trans- , mit the same to Paying Agents who shall apply the same to such payment (B) The Trustee shall withdraw from the Principal Fund, prior to each Principal Installment Date, an amount equal to the principal amount of the Outstanding Bonds, if any maturing on said Principal Installment Date and shall cause the same to be applied to the payment of the principal of said Bonds when due and is hereby authorized to transmit the same to Paying Agents who shall apply the same to such payment (C) All withdrawals and transfers under the pro- visions of subsection (A) or subsection (B) of this Section shall be made not earlier than one (1) day prior to the Interest Payment Date or Principal Installment Date to which they relate, and the amount so withdrawn or transferred shall, for the purposes of this Resolution be deemed to remain in and be part of the appropriate Fund until such Interest Payment Date or Principal Installment Date -42- 1 1869 rr 270 605 Application of Sicking Fund (A) The Trustee shall apply moneys in the Sinking Fund to the purchase or the redemption of the Term Bonds in the manner provided in this Section and to the payment of the pr:�r._pal trereof at maturity, _ c pro,ided t at -:. aLc 3oras s^all be so purchased durinc the period of -^___. J ) days next precedirg the date of a S.nki^g Fund stat ne» established for such Bonds The purchase price paid bv the Trustee (excluding accrued interest (which be paid from the Interest Fund) but including any brokerage and other charges) for any Bond purchased pursuant to this Section shall not be less than par nor more than the Redemp- tion price of such Bond applicable upon its redemption by operation of the Sinking Fund through application of the moneys available for such purchase cn the next date of a Sinking Fund Installment established for such Bonds Sub- ject to the limitations hereinbefore set forth or referred to in this Section, the Trustee shall purchase Bonds at such times, for such prices, in such amounts and in such manner (whether after advertisement for tenders or otherwise) as the Trustee in its discretion may determine and as may be possible with the amount of moneys available therefor in t"e Sinking Fund If on any date there shall be moneys in any such Sinking Fund and there shall be no Outstand_na Term + Bonds such Sinking Fund shall be closed and the '"rustee shall transfer any moneys therein to the Revenue Furd (B) As soon as practicable after t` -,e forty-fifth and before the twenty-fifth day prior to the Principal In- stallment Date of each Sinking Fund Installment, the Trustee shall call for redemption in the manner provided in Article IV on the said Principal Installment Date of said Sinking Fund Installment and by application of said Sinking Fund Installment redeem such principal amount of the Bonds en- titled to said Sinking Fund Installment less such amounts of Bonds purchased during the twelve (12) months prior to such Principal Installment Date pursuant to subsection (A) of this Section, and on such redemption date the Trustee shall apply the moneys in such Sinking Fund to the payment of the Redemption Price of the Bonds so called for redemption 606 Application of Prior Redemption Fund (A) Moneys in the Prior Redemption Fund shall be applied to special mandatory redemption of Bonds under the circumstances and from the sources of funds set forth in Sections 401(B) and 504(E) and (F) and in the manner pro- vided in Section 401(C) -43- (B) In the evert of optional redemption of Bonds pursuant to Section 401(C), the Trustee shall, upon receipt of the Officer's Certificate referred to in subsection (C), apply moneys in the Prior Redemption Fund to the purchase of the Bonds designated in said Officer's Certificate at t':e most advantageous price obtainable with due diligence, SLC price (excluding accrued interest (Which shall beypa_d fro,: t'^e Interest Fund) but including anv broerace or oz. -ler c :arges) not to be less than oar nor more than the Redemp- tion Price of such Bonds applicable on the next ersuina redemption date for such Bonds Bonds not so purchased may be redeemed at a Redemption Price and at the time and in the manner provided in Article IV Bonds shall not be purchased pursuant to this subsection di.ring the thirty (30) days prior to a redemption date from moneys to be applied to the redemption of Bonds on such date (C) Any Bonds to be purchased or redeemed by the Trustee at the option of the City pursuant to Section 401(C) from moneys in the Prior Redemption Fund shall be purchased or redeemed by the Trustee only upon receipt by the Trustee of an Officer's Certificate determining or certifying the following: (1) the maturities from which Bonds are to be purchased or redeemed; (2) the principal amount of 3ords withi" such maturities to be purchased or redeemed (3) if any of the Bonds to be purchased or redeemed as designated in paragraphs (1) and (2) hereinabove are Term Bonds, the years in which Sink- ing Fund Installments are to be reduced and the amount by which the Sinking Fund Installments so determined are to be reduced, provided that the aggregate of such reductions in Sinking Fund Installments shall equal the aggregate principal amount of Term Bonds to be pur- chased or redeemed; and (4) the prior redemption date 607 Deficiencies in Bond Funds (A) In the event that five (5) days prior to any Interest Payment Date the amount in the Interest Fund, after transfer to the Interest Fund of any available funds in the Residual Fund is insufficient to pay the interest due on the Bonds on said Interest Payment Date, the Trustee shall with- draw from the Mortgage Reserve Fund and deposit in the Inter- est Fund the amount of such deficiency, and in the event that there remains a deficiency in the Interest Fund after -44- 1 a 271 272 such transfer, ti -e Trustee shall withdraw from the Dept Service Reserve Fund and deposit in the Interest Fund the amount of such deficiency remaining In the event that there remains a deficiency in the Interest Fund after "i a vi ng one . s from the 'Mortgage Reser re Furd and the Debt Ser rice Reser re Fund the "'rustee shall transfer none . s frcm anv ot''er Furd or Account pledged to tre nay-'ent of interest or t- e Rnds i nc' Ldinc, (ard in t: e following o'- e-) t e PrincipalFund and t; e Sin.King Fund to the rote -as t in the amount of suc'n deficiency (3) In the event that five (5) days prior to t:^e next succeeding Principal Installment Date t're amount in the Principal Fund (or, in the event that sixty (60) days prior to the next succeeding Principal Installment Date on which a Principal Installment payable from a Sinking Fund is re- quired to be made, the amount in such Sinking Fund), after transfer to the Principal Fund of any available funds in the Residual Fund, is insufficient to pay the Principal Install- ment due on the Bonds to be paid from such Fund on the next succeeding Principal Installment Date, the Trustee shall forthwith withdraw from the following Funds in the following order the amount of such deficiency and transfer the same to the Principal Fund or Sinking Fund, as the case may be - (1) the lortgage Reserve Fund, (2) the Debt Service Reserve Fund, and (3) the Mortgage Loan Purchase Account The amounts so withdrawn from the Mortgage Reserve Fund and the Debt Service Reserve Fund shall be restored from avail- able funds in the Revenue Fund as provided in Section 603(E) and (F), respectively 608 Application of Mortgage Reserve Fund The Trustee shall transfer or pay moneys from the Mortgage Reserve Fund. (1) to the Interest Fund, Principal Fund or Sink- ing Fund for the payment of Principal Installments of and interest on Bonds, in accordance with Section 607 and (2) to such persons named by a Requisition filed with the Trustee for the payment of unpaid Escrow Payments and Mortgage Loan foreclosure fees, including appraisal and legal fees and similar expenses required to preserve or acquire unencumbered title to property through the protec- tion or enforcement of the Trustee's rights conferred by law or the applicable Mortgage Loan and compensation and expenses of the Trustee and any Paying Agent under Section 807; and -45- -71 1 a,“•wc 273 (3) to the Revenue Fund to the extant of any 'Sur- pluses therein at the end of each Bond Year commencing on or after January 1, 1983 609 Application of Debt Service Reserve Fund (A) If at any time tiers shall not be a sufficier't amount in the Interest Fund, 'Principal Fund or Sin,ci- ~ Fu -c, to ma:.a o yment of Princirnal Installments of or interest t E? Bonds and in the event that the amount transferred tom the Residual Fund, or the Mortgage Reserve F„n d is insuf- ficient to make up such deficiency as provided in Section 507, the Trustee shall withdraw from the Debt Service Reserve Fund and pay into the appropriate fund the amount of the defi- ciency then remaining (B) Any surpluses in the Debt Service Reserve Fund shall be transferred to the Revenue Fund at the end of each Bond year 610 Application of Escrow Payments Escrow Payments received by any Servicer, whether separately or as a known part of some other payment, shall be deposited in the applic- able Escrow Payment account and shall be promptly applied by the Servicer to the purpose for which such payments were received, and any such payments received by the Trustee, whether separately or as part of some other payment, sha 1 immediately be paid by the "'Yustee to the Ser/icer and aoplied by the Servicer -. the manner set forth aco ze 611 Application of Operating Fund Except as of''erwisa provided in this Section, all amounts in the Operating Fund shall be applied to the payment of Operating Expenses upon receipt by the Trustee of a Requisition or Officer's Certi- ficate directing such payment Any balance remaining in the Operating Fund on June 30 of any year shall be transfer- red to Revenue Fund 612 Application of Residual Fund (A) Moneys deposited into the Residual Fund shall first be applied by the Trustee to make up any deficiency in the following Funds in the following order FIRST Operating Fund SECOND. Interest Fund THIRD: Principal Fund FOURTH Sinking Fund FIFTH• Mortgage Reserve Fund SIXTH. Debt Service Reserve Fund -46- ol) ' a 274 (B) During the period which terminates October 31, 1982 moneys in the Residual Fund shall next be trans- ferred by the Trustee to the Mortgage Loan Purchase Account and applied by the Trustee upon receipt of an Officer's Certificate to the purchase of additional Mortgage Loans (C) After any such transfers and commencing Llovember 1, 1982, and thereafter to t',e extent provided i Section 504(E) and until the Asset Coverage Test is net,any moneys remaining in the Residual Fund shall he transferred to the Prior Redemption Fund and applied to the purchaseorspecial mandatory redemption of Bonds pursuant to Article IV (D) After the foregoing transfers and on any Interest Payment Date after the Asset Coverage Test is met, any moneys in the Residual Fund shall be transferred to the Prior Redemption Fund and applied to the special mandatory redemption of Bonds to the extent necessary to enable the City to continue to meet the Asset Coverage Test (E) On any Interest Payment Date after the Asset Coverage Test has been met, any amounts remaining in the Residual Fund in excess of amounts required to enable the City to continue to meet the asset Coverage Test as deter- mined by an Officer's Certificate accompanied by an Asset Coverage Test Certificate setting forth t:,e amount of suc, excess shall be either transferred to the Prior Redemotio'- Fund and applied to the optional redemotion of Bonds or shall be transferred by the Trustee to the City free and clear of the lien of this Resolution for use by the City for any lawful purpose, including, but not limited to the pur- chase of Bonds by the City (F) The question of whether the City has met and is continuing to meet the Asset Coverage Test for pur- poses of this Section shall be established by an Asset Cover- age Test Certificate delivered by the City to the Trustee on May 1 and November 1 of each year, commencing November 1, 1982 The Trustee shall conclusively presume that the Asset Coverage Test has not been met unless and until such Asset Coverage Test Certificate has been received 613 Call of All Outstanding Bonds In the event that the amount in the Funds and Accounts created by this Resolu- tion and pledged to the payment of Bonds is sufficient to pay the Redemption Price of and interest on all Bonds Out- standing, the Trustee, upon receipt of an Officer's Certifi- cate authorizing the same, shall withdraw from such Funds and Accounts an amount equal to such Redemption Price of and interest on all Bonds Outstanding and deposit the same in the Prior Redemption Fund -47- 1 1 614 Quarterly Reports The Trustee commencing with the period ending three (3) months after the Issue Date of the Bonds, shall provide the City with quarterly reports covering all receipts paid into and all disbursements made from each Fund and Account held by the Trustee pursuant to the provisions of this Article Such reports shall be mailed by the ^'rastee to the City For so long as The Aetna Casual`, and Surety Company or any of its affiliates is the n.giste:e- owrer of any of the Bonds the Tr.:stee shall also - aLl copies of such reports to said Company -48- 27$ 2'76 ARTICLE VII SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS 701 Security for Deoosits It shall not be necessar; for any Paving Acent to give sec-r_ty for the deposit of an moneys with it 1e' d in trust for t'^e payment of the princi- pal or Redemption Price of or interest on Bonds, or for t' -e Trustee to give security for any moneys which shall be represented by obligations purchased under the provisions of this Resolution as an investment of such moneys 702 Investment of Moneys Held by the Trustee (A) Each of the Funds and Accounts held by the Trustee shall be a trust fund for the purpose thereof Moneys in each of said Funds and Accounts shall be invested by the Trustee in Permitted Investments, provided, that the City may direct the Trustee as to specific Permitted Invest- ments by Officer's Certificate The maturity or redemption date of such investments shall coincide as nearly as prac- ticable with the times at which moneys in said Funds or Accounts will be required for the purposes set forth in this Resolution (3) Permitted Investments purchased as an invest- ment of moneys in any Fund or account 'held by the '^rustee shall he deemed at all times to be a part ofsuc' Fund or Account until such amount is transferred in accordance .lit^ this Resolution (C) In computing the amount in any Fund or Account held by the Trustee Permitted Investments purchased as an investment of moneys therein shall be valued at the actual cost thereof- provided that the Debt Service Reserve Fund and the Mortgage Reserve Fund shall be valued at the cost or market price thereof, determined annually on each Principal Installment Date, whichever is lower, exclusive of accrued interest (D) The Trustee shall sell at the best price obtainable, or present for redemption, any Permitted Invest- ment whenever it shall be necessary in order to provide moneys to meet any payment or transfer from the Fund or Account for which such investment was made 703 Debt Service Reserve Fund Investment Restrictions Moneys in the Debt Service Reserve Fund shall be invested in Permitted Investments maturing up to but not beyond the year of final maturity of the Bonds 704 Mortgage Reserve Fund Investment Restrictions Moneys in the Mortgage Reserve Fund shall not be invested 1- -49- 1 1 Permitted Investments which mature beyond one (1) year `rom the date of investment, provided, that prior to January 1, 1983, moneys in the Mortgage Reserve Fund may be invested in Permitted Investments which mature on or before Jaruar-% 1, 1984 705 Transfer to ?evnue _a -d n.xce7t as '-erein wise expressly provided, the _nterestea_-ied cr ct'-'er -,come derived from the investment or deoosit of moneis an; Fund or Account shall accrue to or be transferred by the T r•lstee upon receipt thereof to the Revenue Fund -50- 277 : 278 ARTICLE VIII THE TRUSTEE AND PAYING AGENTS 801 Tr sstee A000i-itment and Acceptance of Duties The City hereby aocoints Security ?acific rational Sank Los .-:rgeles, California, as Trustee under this Resolution Trustee shall signify its acceptance of the duties and obligations imposed upon it by this Resolution by written instrument of acceptance deposited with the City The property rights, powers and duties of the Trustee under this Resolution are hereby vested in said Trustee in trust for the Bondholders The Trustee (and any successor Trustee) shall have a capital and surplus aggregating at least three hundred million dollars ($300,000 000) and shall have a department which is an approved FdA and VA mortgagee and which is either a FNMA or a FHLMC approved seller/servicer 802 Paying Agents In addition to or substitution of the Paying Agents appointed pursuant to Section 206, the City may at any time or from time to time by Supplemental Resolution appoint one or more other Paying Agents for such Bonds Each Paying Agent shall be a ban.‹, trust compary or national banking association, having a capital and surplus a:,gregating at least fifty million dollars ($50,000,000) Each Paying Agent shall signify its acceptance of t.e duties and obligations imposed upon it by this Resolution by exe- cuting and delivering to the City and the Trustee a .aritte^ acceptance thereof 803 Responsibilities of Trustee and Paying Agents The recitals of fact herein and in the Bonds contained shall be taken as the statements of the City and neither the Trustee nor any Paying Agent assumes any responsibility for the correctness of the same Neither the Trustee nor any Paying Agent shall be deemed to make any representations as to the validity or sufficiency of this Resolution or of any Bonds or coupons issued thereunder or in respect of the security afforded by this Resolution, and neither the Trus- tee nor any Paying Agent shall incur any responsibility or duty with respect to the issuance of the Bonds for value or the application of the proceeds thereof or the applica- tion of any moneys paid to the City. Neither the Trustee nor any Paying Agent shall be under any obligation or duty to perform any act which would involve it in expense or liability or to institute or defend any suit in respect hereof, or to advance any of its own moneys, unless pro- perly indemnified to its satisfaction Neither the Trustee nor any Paying Agent shall be liable in connection with the performance of its duties hereunder except for its own negligence or wilful default. Neither the Trustee nor any -51- 1 1 Paying Agent shall be under any responsibility or duty with respect to the application of any moneys paid to any one of the others The Trustee shall not Pe responsible for t"e validity, execution by other parties thereto, or sufficiency of this Resolution, or anv 'Iortgage Loan Purchase Agreement, the Sellers' Guide, any Servicing Agreement, the Serv_cers Bride or the Bonds ^`ie Trustee undertakes to _perform suc- duties and only such duties as are specifically set fort: it this Resolution and no implied covenants or obligations shall be read into this Resolution against the Trustee In case an Event of Default has occurred and has not been cured, the 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 investor would exercise or use under the circumstances in the conduct of such investor's own affairs The Trustee shall not be personally liable with respect to (i) an error of judgment made in good faith by a responsible officer (as defined in Section 805) of the Trustee unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts, or (ii) any action taken, suffered or omitted to be taken by it in good faith, in accordance with the direction of Holders of not less than 25% in principal amount of the Outstanding Bonds, relating to the time, method and place of conducting anv prcceedi^a for anv remedy available to the ^'rustee, or exerc_sing any trust or t.o:tier conferred upon the Trustee under this Agreement 804 Funds held in Trust All moneys held by the Trustee at any time pursuant to the terms of this Resolution shall be and hereby are assigned, transferred and set over unto such Trustee in trust for the purposes and under the terms and conditions of this Resolution 805 Evidence on Which Trustee May Act The Trustee and any Paying Agent shall be protected in acting upon any notice, resolution, request, consent, order, certificate, report, opinion, bond, or other paper or document believed by it to be genuine, and to have been signed or presented by the proper party or parties The Trustee and any Paying Agent may act upon the opinion or advice of any attorneys approved by them in the exercise of reasonable care The Trustee and the Paying Agents shall not be responsible for any loss or damage resulting from any action or non -action in good faith in reliance upon such opinion or advice Whenever the Trustee or any Paying Agent shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action under this Resolution, such matter (unless other evidence in respect thereof be -52- 2 7 9279 c �` 280 ,,therein specifically prescrioed) may be deemed to be con- clusively proved and established by Officer's Certificate and such Officer's Certificate shall be full warrant for any action taxen or suffered in good faith under the prov..sions� of this Resolution upon the faith thereof, but in its dis- cretion the Trustee or an -7 Paving -gent may in lieu t'nereof accept other evidence of such fact or matter or -.ay recui re such further or additional evidence as to it :nav seem reason- able Except as otherwise expressly provided in this Resolu- tion, any request, order notice or other direction required or permitted to be furnished pursuant to any provision thereof by the City to the Trustee or any Paying Agent shall be sufficiently executed if executed in the name of the City by an Authorized Officer Anything herein to the contrary notwithstanding, when- ever it is provided that the Trustee shall take any action, including the giving of any notice, or refrain from taking any action upon the happening or continuation of a specified event or upon the fulfillment of any condition or upon the request of the Holders, the Trustee shall have no liability for failure to take such action or for failure to refrain from tai.g such action unless ard an til a responsible officer of t'.e Trustee, TATI,o is a responsible officr at t''1e Principal Office, 'las actual :‹nowledge of sach elent or con- tinuation thereof or the fulfillment of such condition or shall have received such request Responsible officer means in the case of the mrustee, the chairman or vice chairman of the executive committee of the board of directors, or trustees the president, any vice president, the secretary, the treasurer, any trust officer, any executive or senior or second or assistant vice presi- dent, or any other officer or assistant officer customarily performing functions similar to those performed by the per- sons who at the time shall be such officers, or to whom any corporate trust matter is referred because of his knowledge of and familiarity with the particular subject The Trustee may execute any of the trusts or powers here- under or perform any duties hereunder, either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it here- under 806 Trustee Reliance on Documents The Trustee may exclusively rely as to the truth of the statements and the correctness of the opinions expressed therein, upon all Re- quisitions, certificates or other documents furnished to the -53- Orr r�r• rr i 1 Trustee pursuant to this Resolution and believed by the Trustee to be genuine All such Requisitions, certificates and other documents shall be retained In the possession of the Trustee, subject at all times during normal business hours to the inspection of the City T e Trustee has no responsibility or liability for the correctness, validity and Genuineness of aryz such Reqp.isi tion, certificate or other document believed by the Trustee to be cenui^e valid and correct 807 Compensation and Expenses T'ie City stall pay to the Trustee and to each Paying Agent from time to time reasonable compensation for all services rendered under this Resolution, and also all reasonable expenses, charges, legal and consulting fees and other disbursements and those of its attorneys, agents and employees, incurred in and about the performance of their powers and duties under this Resolution, and the mrustee and each Paying Agent shall have a lien therefor on any and all funds at any time held by it under this Resolution which lien shall be prior and superior to the lien of the Holders of the Bonds However, the City shall have no obligation hereunder to pay compensation in excess of that originally agreed to by the Trustee and the Paying Agents unless: (i) the Trustee and/or Paving Age^ts shall petition the City for an increase in compensation, (ii) the increase is shown to be warranted by costs of operation (iii) the City in its sole discretion, sha4.1 have approved the increase, and (iv) there are surplus revenues available to the City pursuant to Section 612(E) hereof with which to pay the increase; no Revenues other than such surplus revenues shall be used to pay any such Increase The City further covenants and agrees to indem- nify and save the Trustee and each Paying Agent harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise and performance of its powers and duties hereunder including the costs and ex- penses of defending against any claim of liability but excluding liabilities which are due to its negligence or wilful default The City further covenants and agrees to advance to the Trustee and each Paying Agent, from amounts available therefor in the Operating or Mortgage Reserve Fund, all amounts requested as the costs and expenses of such defense 808 Permitted Acts and Functions The Trustee and any Paying Agent may buy, own, hold and sell any Bonds, coupons or notes of the City, whether heretofore or hereafter issued or created, and may engage or be interested in any financial or other transaction with the City, including (subject to any law or regulations precluding or limiting any relationships between Mortgage Loans and Bond purchase) -54- 28.E 282 serving as a Qualified :Mortgage Lender in the Program with like effect and with the same rights it would have .if it were not such Trustee or Paying Agent The Trustee and any Paying Agent may act as depository for and permit any of its officers or directors to act as a member of or in any other capacity with rPsoect to, anv committee for-ed to orotect the rights of Bondholders or to effect or aid in anv reorganization growing out of tre enforcement of ^e Bonds or this Resolution wi^ether or not anv such committee sha represent the Holders of a majority in principal amount of the Bonds then Outstanding 809 Resignation of Trustee The Trustee may at any time resign and be discharged of the duties and obligations created by this Resolution by giving not less than sixty (60) days' written notice to the City and publishing notice thereof once in an Authorized Newspaper Such resignation shall take effect on the date on which the appointment of a successor Trustee under Section 811 becomes effective 810 Removal of Trustee The Trustee shall be removed by the City if at any time so requested by an instrument or concurrent instruments in writing, filed with the Trus- tee and the City, and signed by the Holders of a majority in principal amount of the Bonds then Outstanding or their attorneys-in-ract dale aut'-'orized, excludinc any Bonds he'd by or for the account of t'.e City '^^e Cit.' may remove the Trustee at any time, except during the existence an :went of Default, for such cause as shall pe determined in the sole discretion of the City by filing with the Trustee an instrument signed by an Authorized Officer 811 Appointment of Successor Trustee In case at any time the Trustee shall resign or shall be removed or shall become incapable of acting or shall be adjudged a bankrupt or insolvent, or if a receiver, liquidator or conservator of the Trustee, or of its property or affairs is appointed the City covenants and agrees that it will thereupon appoint a successor Trustee The City shall publish notice of any such appointment made by it in an Authorized News- paper, such publication to be made within twenty (20) days after such appointment If The Aetna Casualty and Surety Company or any of its affiliates is at the time of such appointment the registered owner of any of the Bonds, the City shall mail notice of such appointment to said Company within twenty (20) days after such appointment If in a proper case no appointment of a successor Trustee shall be made pursuant to the foregoing provisions of this Section within forty-five (45) days after the Trus- tee shall have given to the City written notice, as pro- tided in Section 809 or after a vacancy in the office of -55- L 1 the Trustee shall have occurred by reason of its inability to act the Trustee or the Holder of any Bond may applt + to any court Of comcete''t jurisdiction to appoint a succes- sor 'Trustee Said court may thereupon, after if anv as such court :,ay deem ?roper and :.resc-_beof _ a suc-esso�- Tr stee " -' - ansfer of 7.. .ts a -.d ?rope --7 S :ccas ^ "ruste Ary successor Trustee appointed 'ender t",..5. tion shall execute, acknowledge and deliver }o its predeces- sor Trustee and also to the City, an instrument accettir such appolntme: t, and thereupon such successor Tr; ste.., with- out any further act, deed or conveyance, shall become fully vested with all money, estates, properties, rights, powers duties and obligations of such predecessor Trustee, with like effect as if originally named as Trustee, but the Trustee ceasing to act shall, nevertheless on the written request of the City or of the successor Trustee, execute, acknowledge and deliver such instruments of conveyance and further assurance and do such other things as ma: reason- ably be required for more fully and certainly vesting and confirming in such successor Trustee all the right, title and interest of the predecessor Trustee and to a -v ,roo- erty ^_el:,, by it under th�s Resolution, ard oav cter, assign and .de l.i Ter to the successor "'r'.stee an) money or , other property subject to _'le trusts and co -di -ions her__ 1 set fort'- Should any deed conveyance or _nsz men= i-. writing from the City be recuired by such successor `i -us - tee for more fully and certainly 7estinc in a^'.d cc -firm- ing to such successor Trustee any such estates rights, powers and duties, and and all such deeds, conveya-ces and i-stru- ments in writing shall on request, and so _ar as may be authorized by law, be executed acknowledged and delivered by the City Any such successor Trustee shall premptl,' notify each Paying Agent of its appointment as Trustee 813 Merger, Conversion or Consolidation Any company into which the Trustee may be merged or converted or with which it may be consolidated or any company resulting from any merger conversion or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, shall be the successor to such Trustee without the execution or filing of any paper or the performance of any further act• provided, that such Trustee sha'1 be a bank or trust company organized under the laws of the State or a national banking association and shall have an office `or the transaction of its business in the State and shall be authorized by law to perform all the duties imposed -po.l it by this Resolution -56- 283 284 314 Resignation. or Removal of Paving Agents and A000_^t- ment of Successors Any Paying Agent may at any time resign and be discharged of the duties and obligations c.reat`d by this Resolution by giving at least sixty (60) days .Yritten notice e to the City ard the mr1S:.?e Any P3_ _^g Age^ t .',?a;.l oe removed at anv time bv an _r s : r..-e^±t i _ ed '. 1 =- ir' Acent a -,d the m-eeaasigsus.- ? ed bv_ a. Anv successor ?a Pa,,ira���:nt a^a_1be ap?o_ntee, bi:'et- and shall se a bank or tris t comoary organizes t e _ass of arsy state of t'e United States or a nat-o':al ban.{- ing association and willing and able to accent the office of Paying Agent on reasonable and customary terms and authoriz- ed by law to perform all the duties imposed upon it by this Resolution. In the event of the resignation or removal of any pai1ng Agent, such Paying Agent shall pay over, assign and deliver any moneys held by it to its successor, or if there be no successor then appointed, to the Trustee until such succes- sor be appointed 815 Trustee to Act as Servicer In the event that a Servicer shall cease to perform its obligations under and pursuant to a Servicing Agreement, the mrasteeria.; at its ootior either appoint a supsti tote ser/icer ( :.Lc- su b - s =_tate servicer must cualifi as a 7La . 4 under ti'e Prc:.ram) or -ndei .-.' ,;:e to `�f�r." : »e ob u i iati ma of the Servicer itself TheCiL.. cc Tenn� aee i.a ard au'^S to.� reimburse the "'rustee from surplus ._eve-'ues (if a"v) aiail- able to the Trustee or the City pursuant to Section o12(E) nereof for any and all reasonable expenses incurred by the Trustee in either appointing a substitute servicer or under- taking the servicing function itself In the event that the then current generally prevailing fee paid to servicers of conventional single family mortgage loans in the C_ty ex- ceeds the servicing fee provided for in the applicable Servicing Agreement, the City agrees to oay the substitute servicer or the "rustee as the case may be, the amount of such excess as additional compensation over and above that which is provided for in said Servicing Agreement; orovided however, that the City's obligation to mane such pavments shall be limited to the amount of surplus revenue, if any, available to the Trustee or the City pursuant to Section 612(E) hereof -57- 1 285 ARTICLE IX COVEJAI1TS OF THE CITY The Ci -7 ro Tenants ani agrees 42-t":": t'^e ;Toi.'ers Bonds as follows. mw Zvi Pa•rienb of Rands T'r.e C i`y shalt' prompt':pa_ a. -v and all Pledced ?eve'iues recei✓ed by it to the '"rustee for deposit and application thereof to the payment of the principal or Redemption Price, if any, of ever,? Bond a -d t"e interest thereon, at the dates and p'aces aid i'1 the manner provided in the Bonds and in the coupons thereto appertain- ing, according to the true intent and meaning thereof 902 Extension of Payment of Bonds and Coupons The City shall not directly or indirectly extend or assent to the extension of the maturity of any of the Bonds or the time of payment of any of the coupons or claims for interest by the purchase or funding of such Bonds coupons or claims for interest or by any other arrangement, and in case the maturity of any of the Bords or the time for paz- e it of any such couoons or claims for interest shall be c.%tided, s.,ch Bonds, coupons or .iaims' for interest shall not be entitled tri case of any de_ault an.-er ' 113 ' esC1.. 1 to the be 'e it of this Resolution or _o an pav"ne'^ L out of ans of the funds held ov the Trustee or any Paving Agent, except subject to the prior payment of _''e o_l.nc1pal of ;l, 3onds issued and Outstanding the maturity of which has ^ct been extended and of such portion of the accrued interest on the Bonds as shall not be represented by such extended coupons or claims for interest 903 Further Assurances At any and all times the City shall upon written request of Trustee, so far as it may be authorized or permitted by law, pass, make, do, execute, acknowledge and deliver, all and every such further resolutions, acts, deeds, conveyances, assignments, trans- fers and assurances as may be necessary or desirable for t'^e better assuring, conveying, granting, assigning, confirming and effecting all and singular the rights, Revenues, "ort - gage Loans, Funds and Accounts and other moneys securities funds and property hereby pledged or assigned or intended so to be or which the City may hereafter become bound to pledge or assign in trust 904 Power to Issue Bonds and Make Pledges Tre City is duly authorized pursuant to law to authorize and issue the Bonds and to adopt this Resolution and to pledge the Pledged Revenues, Mortgage Loans and ^ands and Accounts, purported to be pledged by this Resolution in the Taal^er and -58- to the exednprovided in this Resolution ''e Pledged Revenues, 2•:ortgage Loars and Funds and Accounts so pledged are and will be free and clear of any pledge lien, charge or encumbrance thereon or with respect thereto prior tc or of equal rank with, the pledge created by this Resolution for the liens in favor of the r"rustee and 'a,_-.g Agents provided in Section 307 hereof, and all corporate action or the cart of City to that end has been duly and val day taken The Bonds and the provisions of this Resolutior are a~d ;gill be the valid and legally enforceab'e obliaatio oz the City in accordance aith their terms and t-e terms of this Resolution The City shall at all times, to the extent permitted by law, defend, preserve and protect t'e pledge of the Pledged Revenues `Iortgage Loans and Funds and Accounts under this Resolution and all the rights of the Bondholders under this Resolution against all claims and demands of all persons whomsoever 905 Accounts and Reports (A) The City shall keep proper books of record and account in which complete and correct entries shall be made of its transactions relating to all Mortgage Loans Pledged Revenues and all Funds and Accounts established by this Resolution, which shall at all reasonable times be subject to the inspection of the '''r•,;stee and the -7o1c7. -s of. a^ aggregate of '•'ot less than five percent (D%) _n t,r' ric ca amount of t'ne Bonds then Outstanding cr tne�.r reorese^- tatizes duly authorized in writing J (3) The City shall annually, within one hundred and twenty (120) days after the close of each Fiscal Year file with the Trustee a copy of an annual report regarding its Residential Mortgage Financing Program (^ere_nafter in this subsection referred to as the "Program") for suc'' Fiscal Year, accompanied by an Accountant's Certificate, setting forth in complete and reasonable detail the follow- ing matters relating to the Program (i) the operatiors and accomplishments of the Program (ii) receipts and expendi- tures of the Program during such Fiscal Year in accordance with the categories or classifications established by t}'e City for its operating and capital outlay purposes (iii) the assets and liabilities of the Program at the erd of such Fiscal Year including a schedule of its Mortgage Loans and the status of the Funds and Accounts established by this Resolution; and (iv) a schedule of its Bonds Outstanding at the end of such Fiscal Year, together with a statement of the amounts paid, redeemed and issued during such Fiscal Year A copy of each such annual report and Accountant's Certificate shall be mailed by the City to the Trustee Standard & Poor's Corporation tloody's Investors Serzice, Inc , and each Bondholder who shall have filed his name and address with the City for such purpose -59- 287 (C) The Trustee shall maintain a record of the monthly payments to be remitted to the '^rustee by eacr Ser- vicer and shall reconcile monthly the scheduled amount with the amount actually remitted all based on data to be pro- vided by the Servicers pursuant to Servicing Aareements, and shall provide a copy of such record to the C_tv 1 906 Personnel and Servicing of ''.ortgac es r"he Ci`, shall at all times appoint, retain and employ competentV sdoervisory personnel for the purpose of carrying out its Res-dential Mortgage Financing Program and shall establish and enforce reasonable rules, regulations and standards for all Residential Acquisition and for serv_cina `tortgage Loans The City shall cause all such Residential acquisi- tion to be accomplished in an efficient and economical manner All persons employed by the City shall be qualified for their respective positions Nothing herein shall mean or be deemed to be a prohibition against the City's con- tracting for all or any part of such services 907 Payment of Premiums If the Trustee shall not have paid the same, the City shall promptly pay the annual premiums on Special Hazard Insurance, (to the extent that such payments represent Operating Expenses under Secticn 102) and on Hazard Insurance not otherwise paid from mo^evs in t'ze Operating Fund 903 Waiver of Laws The City shall nct (to the ex- tent then permittee: by 'aw) at time insist uco^ or plead in any manner whatsoever, or claim or take tie .:e^efit o' advantage of any stay or extension law now or at ary time hereafter in force which may affect the covenants and agree- ments contained in this Resolution or Supplemental Resolu- tion or in the Bonds, and all benefit or advantage or any such law or laws is hereby expressly waived by the City 909 Compliance with Conditions Precedent Upon the date of issuance of any of the Bonds, all conditions, acts and things required by law or by the Resolution to exist to have happened or to have been performed precedent to or in the issuance of such Bonds shall exist, have happened and have been performed, and such Bonds, together with all otrer indebtedness of the City, shall be within every debt and other limit prescribed by law 910 Issuance of Additional Obligations (A) The City shall not hereafter create or per- mit the creation of or issue any obligations or create ani additional indebtedness which will be secured by a charge -60- X8`8 and lien on the Pledged Revenues, .lortgace Loans or Funds and Accounts or which will be payable from the Interest Fund, Principal Fund, Sinking Fund, Mortgage Reserve Fund, Debt Service Reserve Fund or Residual Fund except for the Bonds authorized herein (3) The City expressly reser7es the right to adopt one or more other general bond resolut_ons for any of its programs, and reser;es the right to issue other obliga- tions so long as same are not a charge or lien on the Pledg- ed Revenues, Mortgage Loans or Funds and Accounts, or pay- able from the Funds or Accounts established and created pursuant to Article V hereof, and maintained pursuant to the Resolution, provided, however, that no such other general bond resolution shall be adopted with respect to such a financing program nor shall any obligations be issued under any such general bond resolution if the amount of the Debt Service Reserve Fund is less than the Debt Service Reserve Requirement; and provided further that no bonds the primary purpose of which is the Financing of Residential Acquisition shall be issued until all moneys in the Mortgage Loan Purchase Account have been expended 911 Program Covenants (A) Tie City shall from t -me to time, with a_1 practical dispatch and _n a sound and economical manner consistent in all respects with t'r'e Ordinance and with t're provisions of tris Resolution use and aooiy the proceeds of tie Bonds to the purchase of Aortgage Loans, and shall do all such acts and things necessary to receive and collect or cause to be received and collected Revenues and Escrow Payments, as may be consistent with sound banking practices and principles and shall diligently enforce, and take all steps, actions and proceedings reasonably necessary in the judgment of the City for the enforcement of all terms, covenants and conditions of Mortgages and Mortgage Loans (B) No Mortgage Loan shall be purchased under this Resolution unless it shall have been finally endorsed for Private Mortgage Insurance or a firm commitment for such endorsement obtained (C) All Servicing Agreements entered into pur- suant to this Resolution shall include the provisions of the Servicers' Guide, as approved by the City and the City will not amend the Servicers Guide to reduce the standard of performance of Servicers thereunder to less than those required by FHLMC (D) The City shall diligently enforce, and take all steps, actions and proceedings reasonably necessary i' the judgment of the Agency for the enforcement of all terms, -61- L 1 covenants and conditions of :'1ortgage Loan Purchase Agree- ments, Servicing Agreements, the Sellers' Guide and Servicers' Guide (E) Nothing in this Resolut.`on shall be construed to prohibit ti -e City (or tie Trustee acting for and o - behalf of tee Cit7) from caasi-ig a Qualified 'Mortgage ender to repurchase a Iortgaae Loan at oar in accordance .with the applicable Mortgage Loan Purchase Agreerie-t (F) The City shall require Qualified Iortgage Lenders and Servicers to comply with all rules and regula- tions of the Mor}gage Insurer issuing 'ortgage Insurance for the applicable Mortgage Loan and shall further require Quali- fied Mortgage Lenders and Servicers to hold the City, the Trustee and the Bondholders harmless for non-compliance with such rules and regulations (G) The proceeds of Mortgage Insurance or fore- closure or sale of the Residence or liquidation of a Mort- gage Loan or the net proceeds of Hazard Insurance or Special Hazard Insurance paid to the Trustee shall be deposited in the Revenue Fund (H) The Trustee, on behalf of the Cit\ may at any time sell, assign or otherwise dispose of one or -::bre ';ortgage Loans If after giving effect `'zereto, f.:nds available in all Funds and accounts (other than the Operat- i-g Fund and the Prior Redemption Fand) will permit the defeasance of all Outstanding Bonds pursuart to Artic' e as demonstrated by an Accountant's Certificate delivered to the Trustee prior to any such sale, assignment or disposi- tion (I) Commencing not later than Jovemoer 1, 1982, and on every May 1 and November 1 thereafter the City will furnish the Trustee with an Asset Coverage Test Certificate The Trustee shall be entitled to rely on asset Coverage Test Certificates for the purpose of making redemptions of ponds and releasing amounts in the Residual Fund to the City for any lawful purpose, free of the lien of this Resolution (J) No amounts which have been deposited in a Mortgage Loan Purchase Account shall he used to purchase any Mortgage Loan unless either. (i)(a) the effective yield to the City on the Mortgage Loan to be so purchased equals or exceeds the interest rate for Mortgage Loans used i -i the computations contained in the Certificate of Pledged Re.erues delivered pursuant to Subsection 5 of Section 207, and gib) the Mortgage Loan to be so purchased shall have a final maturitv date no later than the final Principal Installmert Date of the Bonds, or (ii) there is delivered to t're Trustee an appropriate Certificate of Pledged Revenues, together wit: a Requisition for the purchase of such a 1ortgace Loan -62- 289 290 912 Non -Arbitrage Covenant The City hereby covenants that it will make no use of the proceeds of the Bonds at any time during the term thereof which will cause the Bonds to be arbitrage bonds within the meaning of Section 103(c) of the Internal Revenue Code of 1954, as amended, and any applicable regulations promulgated thereunder 913 Ton -Arbitrage Certification The Finance Director of the City is authorized to certify that on t'ze basis of the facts, estimates and circumstances in existence on t' -,e date of issue of the Bonds it is not expected that the proceeds of the Bonds will be used in a manner that would cause the Bonds to be arbitrage bonds In addition to the matters certified, the Finance Director of the City is also authorized and instructed to set forth in brief summary terms the facts and estimates upon which the City's expecta- tion that the Bonds will not be used in a manner that would cause the Bonds to be arbitrage bonds is based The certifi- cation of the Finance Director shall be delivered to the purchaser together with the Bonds 1 -63- 4.11 6.0 291 ARTICLE X SUPPLEMENTAL RESOLUTIONS 1001 Adootion and Filing The City may adopt at anz tire or from time to time a Supplemental Resolution or Supplemental Resolutions for any one or more of the follow- ing purposes and any such Supplemental Resolution shall become effective in accordance with its terms and upon filing with the Trustee of a copy thereof certified by an Authorized Officer: (1) to add additional covenants and agree- ments of the City for the purpose of further securing the payment of the Bonds, provided such additional covenants and agreements are not contrary to or incon- sistent with the covenants and agreements of the City contained in this Resolution (2) to prescribe further limitations and restrictions upon the issuance of Bonds and the insur- ring of indebtedness by the City which are not contrary to or inconsistent with the limitations and restric- tions thereor theretofore in effect; (3) to surrender any right, power or priii- lege reserved to or conferred upon the City by the terms of this Resolution; (4) to confirm as further assurance any pledge under and the subjection to any lien, claim or pledge created or to be created by the provisions of this Resolution of the Pledged Revenues, Mortgage Loans, funds and Accounts or of any other moneys, securities or funds; (5) with the consent of the Trustee, to cure any ambiguity or defect or inconsistent provision in this Resolution or to insert such provisions clari- fying matters or questions arising under this Resolu- tion as are necessary or desirable in the event any such modifications are not contrary to or inconsistent with the resolution as theretofore in effect 1002 Supplemental Resolutions Effective with Consent of Bondholders The provisions of this Resolution may be modified at any time or from time to time by a Supplemental Resolution, subject to the consent of Bondholders in accord- ance with and subject to the provisions of Article XI hereof -64- 292 such Supplemental Resolution to become effective upon the filing with the Trustee of a copy thereof certified by an Authorized Officer 1003 General Provisions Relating to Supplemental Resolu- tions This Resolution shall not be modified or amender in any respect except in accordance with and subject to the provisions of this Article X and Article XI Nothing con- tained in this Article X or Article XI shall affect or limit the right or obligation of the City to adopt, mace, do, execute or deliver any resolution, act or other instru- ment pursuant to the provisions of Section 903 or the right or obligation of the City to execute and deliver to the Trustee or any Paying Agent any instrument elsewhere in this Resolution provided or permitted to be delivered to the Trustee or any Paying Agent A copy of every Supplemental Resolution adopted by the City when filed with the Trustee shall be accompanied by a Counsel's Opinion stating that such Supplemental Resolu- tion has been duly and lawfully adopted in accordance with the provisions of this Resolution, is authorized or permit- ted by this Resolution and is valid and binding upon the City and enforceable in accordance with its terms The Trustee is hereby authorized to accept delivery of a certified copy of any Supplemental Resolution permittec' or authorized pursuant to the provisions of this Resolution and to make all further agreements and stipulations whic'r may be contained therein, and, in taking such action, the Trustee shall be fully protected in relying on Counsel's Opinion that such Supplemental Resolution is authorized or permitted by the provisions of this Resolution No Supplemental Resolution changing, amending or modi- fying any of the rights or obligations of the Trustee or any Paying Agent may be adopted by the City without the written consent of the Trustee or Paying Agent affected thereby -65- 1 r lowit 1 293 ARTICLE XI AMENDMENTS OF RESOLUTION 1101 Powers of Amendment Any modification or amend- ment of this Resolution, and of the rights and obligations of the City and of the Holders of the Bonds and coupons thereunder in any particular, may be made by a Supplemental Resolution, with the written consent given as hereinafter provided in Section 1102, of the Holders of at least two- thirds in principal amount of the Bonds Outstanding at the time such consent is given No such modification or amend- ment shall permit a change in the terms of redemption or maturity of the principal of any Outstanding Bond or of any installment of interest thereon or a reduction in the prin- cipal amount or the Redemption Price thereof or in the rate of interest thereon without the consent of the Holder of such Bond, or shall reduce the percentages or otherwise affect the classes of Bonds the consent of the Holders of which is required to effect any such modification or amend- ment 1102 Consent of Bondholders. The City may at any time adopt a Supplemental Resolution making a modification or amendment permitted by the provisions of Section 1101 to take effect when and as provided in this Section A copy of such Supplemental Resolution (or brief summary thereof or reference thereto in form approved by the ^rustee) together with a request to Bondholders for their consent thereto in form satisfactory to the Trustee, shall be mailed by the City to Bondholders and shall be published at least once a week for two (2) successive weeks (but failure to mail such copy and request shall not affect the validity of the Sup- plemental Resolution when consented to as in this Section provided) Such Supplemental Resolution shall not be effec- tive unless and until (i) there shall have been filed with the Trustee (a) the written consent of Holders of the per- centages of Outstanding Bonds specified in Section 1101 and (b) a Counsel's Opinion stating that such Supplemental Resolution has been duly and lawfully adopted and filed by the City in accordance with the provisions of this Resolu- tion, is authorized or permitted by this Resolution, and is valid and binding upon the City and enforceable in accord- ance with its terms, and (ii) a notice shall have been published as hereinafter in this Section 1102 provided Each such consent shall be effective only if accompanied by proof of the holding, at the date of such consent, of the -66- 294 Bonds with respect to which such consent is given which proof shall be such as is permitted by Section 1301 A certificate or certificates by the Trustee filed with the Trustee that it has examined such proof and that such proof is sufficient in accordance with Section 1301 s' -all be con- clusive that the consents have been given by the Holders of the Bonds described in such certificate or certificates of the Trustee Any such consent shall be binding upon the "older of the Bonds giving such consent and, anything in Section 1301 to the contrary notwithstanding, upon any sub- sequent Holder of such Bonds and of any Bonds issued in ex- change therefor (whether or not such subsequent Holder thereof has notice thereof), unless such consent is revo,ced in writing by the Holder of such Bonds giving such consent or a subsequent Holder thereof by filing with the Trustee prior to the time when the written statement of the Trustee hereinafter in this Section 1102 provided for is filed, such revocation and, if such Bonds are transferable by delivery, proof that such Bonds are held by the signer of such revoca- tion in the manner permitted by Section 1301 The fact that a consent has not been revoked may likewise be proved by a certificate of the Trustee filed with the Trustee to the effect that no revocation thereof is on file with the Trustee At any time after the Holders of the required percentages o` Bonds shall have filed their consents to the SurDolemPntal Resolution, the Trustee shall mace and file with the Ci_' and the Trustee a written statement that the uioiders of such required percentages of 3onds have filed such consents Such written statement shall be conclusive evidence that suc' con- sents have been so filed At any time thereafter notice, stating in substance that the Supplemental Resolution (which may be referred to as a Supplemental Resolution adopted by the City on a stated date, a copy of which is on file with the Trustee) has been consented to by the dolders of the re- quired percentages of Bonds and will be effective as provided in this Section 1102, may be given to Bondholders by the City by mailing such notice to Bondholders (but failure to mail such notice shall not prevent such Supplemental Resolution from becoming effective and binding as in this Section 1102 provided) and by publishing the same at least once not more than ninety (90) days after the Holders of the required percentages of Bonds shall have filed their consents to the Supplemental Resolution and the written statement of the Trustee hereinabove provided for is filed. The City shall file with the Trustee proof of the publication of such notice, and, if the same shall have been mailed to Bond- holders, of the mailing thereof A transcript, consisting -67- 1 295 of the papers required or permitted by this Section 1102 to be filed with the Trustee, shall be proof of the matters therein stated. Such Supplemental Resolution making such amendment or modification shall be deemed conclusizely bind- ing upon the City, the Trustee, each paying Acent and the Holders of all Bonds and coupons at the expiration of t^_rty (30) days after the filing with the Trustee of the proof + of the first publication of such last mentioned notice, ex- cept in the event of a final decree of a court of competent jurisdiction setting aside such Supplemental Resolution in a legal action or equitable proceeding for such purpose com- menced within such thirty (30) day period provided, however, that the City, the Trustee and any Paying Agent during such thirty (30) day period and any such further period during which any such action or proceeding may be pending shall be entitled in their absolute discretion to take such action, or to refrain from taking such action, with respect to such Supplemental Resolution as they may deem expedient 1103 Modifications by Unanimous Consent The terms and provisions of this Resolution and the rights and obligations of the City and of the Holders of the Bonds and coupons thereunder may be modified or amended in any respect upon the adoption and filing with the Trustee by the City of a Supplemental Resolution and the consent of the Holders of all of the Bonds then Outstanding, such consent to be gi fen as provided in Section 1102 except that no notice of Bond- holders either by mailing or publication shall be required 1104 Mailing and Publication (A) Any provision in this Article for the mailing of a notice or other document to Bondholders shall be fully complied with if it is mailed postage prepaid only (i) to each registered owner of Bonds then Outstanding at his ad- dress, if any, appearing upon the registry books of the Trustee, (ii) to each Holder of any Bond payable to bearer who shall have filed with the Trustee within two (2) years preceding such mailing an address for notices and the number or numbers of their respective Bonds, and (iii) to the Trustee (B) Any provision in this Article for publication of a notice or other matter shall require the publication thereof only in an Authorized Newspaper -68- 296 1105 Exclusion of Bonds Bonds owned or `field by or for the account of the City shall not be deemed Outstanding for the purpose of consent or other action or any calculation of Outstanding Bonds provided for in this Article, and the City shall not be entitled with respect to such Bonds to give any consent or tare any ot',er action provided for in this Article At the time of any consent or ot'"er action taken under this Article, the City shall furnish the Trustee a certificate of an Authorized Officer upon which the Trustee may rely, describing all Bonds so to be excluded 1106 Notation on Bonds. Bonds delivered after the effective date of any action taken as in Article X or this Article provided may, and if the Trustee so determines, shall bear a notation by endorsement or otherwise in form approved by the City and the Trustee as to such action, and in that case, upon demand of the Holder of any Bond Out- standing at such effective date and upon presentation of said Bond for the purpose at the Principal Office of the Trustee, suitable notation shall be made on such Bond by the Trustee as to any such action If the City or the Trustee shall so determine, new Bonds so modified as in the opinion of the Trustee and the City to conform to such action shall be prepared and delivered, and upon demand of the Holder of any Bond then Outstanding shall be exchanged, without cost to such Bondholder, for Bonds of the same maturity then Outstanding, upon surrender of such Bonds wit all unpaid coupons, if any, appertaining thereto -69- Iwo 1 t .f ARTICLE XII DEFAULTS AND REMEDIES 297 1201 Events of Default Each of the following events is hereby declared an "Event of Default". (1) if the payment of the principal or Redemption Price of any Bond or any Sinking Fund Installment is not made when and as the same shall become due, whether at maturity or upon call for redemption, or otherwise; or (2) if the payment of interest on any Bond is not made when and as the same shall become due and such default shall continue for a period of thirty (30) days• or (3) if the City shall fail or refuse to comply with the provisions of the Ordinance, or shall default in the performance or observance of any other of the covenants, agreements, or conditions on its part in this Resolution, any Supplemental Resolution, or in the Bonds contained, and continuance of such default for a period of ninety (90) days after written notice thereof by the Trustee; or (4) if the City shall file a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws or any other applicable law of the United States of America, or if a court of competent jurisdiction shall approve a petition, filed with or without the consent of the City, seeking reorganization under the federal bankruptcy laws or any other applicable law of the United States of America, or if, under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or control of the City or of the whole or any substantial part of its property, provided, however, that an event of default shall not be deemed to exist under the provisions of paragraph (3) above upon the failure of any Servicer to enforce any obligation undertaken by a Mortgagor pursuant to the provisions of a Mortgage, including the making of the repayments required pursuant to such Mortgage, so long as the Servicer may be otherwise permitted by law and so long as the City shall be provided with money sources, other than withdrawals from or reimbursements of the Debt Service Reserve Fund, sufficient in amount to pay the Principal Installments of and interest on all Bonds as the same shall become due during the period for which the Servicer shall be permitted by law to abstain from enforcing the obligations of Mortgagors under the applicable Mortgages -70- 1202. Remedies Upon the happening and continuance of any Event of Default specified in Section 1201, then, and in each case, the Trustee may proceed, and upon the written request of the Holders of not less than twenty-five percent (23%) in principal amount of the Outstanding Bonds scall proceed, in its own name, to protect and enforce its rights and the rights of the Bondholders by such of the following remedies, as the Trustee, being advised by counsel shall deem most effectual to protect and enforce such rights: (1) by suit, action or proceeding, enforce all rights of the Bondholders, including the right to require Servicers to collect repayments required pursuant to the Mortgage held by them adequate to carry out the covenants and agreements contained in this Resolution and to require the City to perform its duties under the Ordinance (2) by bringing suit upon the Bonds or to enforce payment of other sums payable to the Trustee or any Paying Agent; (3) by action or suit, require the City to account as if it were the trustee of an express trust for the Holders of the Bonds• and (4) by action or suit, enjoin any acts or things which may be unlawful or in violation of the rights of t"e Molders of the Bonds or to compel the City or any Qualified Mortgage Lender or Servicer to perform their respective duties under this Resolution and any Servici-g Agreement, or Mortgage Loan Purchase Agreement 1203 Priority of Payments After Default In the event that the funds held by the Trustee and Paying Agents shall be insufficient for the payment of interest and Principal Installments or Redemption Price then due on the Bonds and under this Resolution, such funds and any other moneys re- ceived or collected by the Trustee acting pursuant to this Resolution and this Article XII, after making provision for the payment of any expenses necessary in the opinion of the Trustee to protect the interests of the Holders of the Bonds, and for the payment of the charges and expenses and lia- bilities incurred and advances made by the Trustee in the performance of its duties under this Resolution shall be applied as follows - (1) Unless the principal of all the Bonds shall have become due and payable, -71- c 1 99 First: To the payment to the persons enti- tled thereto of all installments of interest then due in the order of the maturity of such installments, and, if the amount available shall not be sufficient to pay in full any installment, then to the payment thereof ratably, according to the amounts due on such installment, to the persons entitled thereto, without any discrimination or preference; and Second• To the payment to the persons enti- tled thereto of the unpaid principal or Redemption Price of any Bonds which shall become due, whether at maturity or by call for redemption, in the order of their due dates and, if the amounts available shall not be sufficient to pay in full all the Bonds due on any date, then to the payment thereof ratably, according to the amounts of principal or Redemption Price due on such date, to the persons entitled thereto, without any discrimination or preference (2) If the principal of all of the Bonds shall have become due and payable, to the payment of the principal and interest then due and unpaid upon the Bonds without preference or priority of principal over interest or interest over prin- cipal, or of any installment of interest over any other in- stallment of interest, or of any Bond over any other Bond, ratably, according to the amounts due respectively for prin- cipal and interest, to the persons entitled thereto without any discrimination or preference except as to any difference in the respective rates of interest specified in the Bonds and coupons The provisions of this Section 1203 are in all respects subject to the provisions of Section 902 Whenever moneys are to be applied by the Trustee pur- suant to the provisions of this Section, such moneys shall be applied by the Trustee at such times, and from time to time, as the Trustee in its sole discretion shall determine, having due regard to the amount of such moneys available for application in the future; the deposit of such moneys with the Paying Agents, or otherwise setting aside such moneys in trust for the proper purpose, shall constitute proper appli- cation by the Trustee; and the Trustee shall incur no lia- bility whatsoever to the City, to any Bondholder, or to any other person for any delay in applying any such moneys, so long as the Trustee acts with reasonable diligence, having due regard for the circumstances, and ultimately applies the same in accordance with such provisions of this Resolu- tion as may be applicable at the time of application by the -72- goo Trustee. Whenever the Trustee shall exercise such discre- tion in applying such moneys, it shall fix the date (which shall be an Interest Payment Date unless the Trustee shall deem another date more suitable) upon which such application is to be made and upon such date interest on the amounts of principal to be paid on such date shall cease to accrue The Trustee shall give such notice as it may deem appro- priate for the fixing of any such date The Trustee shall not be required to make payment to the Holder of any unpaid coupon or any Bond unless such coupon or such Bond shall be presented to the Trustee for appropriate endorsement or for cancellation as fully paid 1204 Termination of Proceedings In case any proceed- ing taken by the Trustee on account of any event of default shall have been discontinued or abandoned for any reason then in every such case the City, the Trustee and the Bondholders shall be restored to their former positions and rights here- under, respectively, and all rights, remedies, powers and duties of the Trustee shall continue as though no such pro- ceeding had been taken 1205 Bondholders' Direction of Proceedings Anything in this Resolution to the contrary notwithstanding, the Holders of the majority in principal amount of the Bonds then Out- standing shall have the right, by an instrument or concurrent instruments in writing executed and delivered to the Trustee, to direct the method of conducting all remedial proceedings to be taken by the Trustee hereunder; provided that such direction shall not be otherwise than in accordance with law or the provisions of this Resolution, and that the Trustee shall have the right to decline to follow any such direction which in the opinion of the Trustee would be unjustly pre- judicial to Bondholders not parties to such direction 1206 Limitation on Rights of Bondholders No Holder of any Bond shall have any right to institute any suit, action or othe proceeding hereunder, or for the protection or enforcement of any right under this Resolution or any right under law unless such Holder shall have given to the Trustee written notice of the event of default or breach of duty on account of which such suit, action or proceeding is to be taken, and unless the Holders of not less than twenty- five percent (25%) in principal amount of the Bonds then Outstanding shall have made written request of the Trustee after the right to exercise such powers or right of action, as the case may be, shall have accrued, and shall have afforded the Trustee a reasonable opportunity either to -73- • 6.0 1 301 proceed to exercise the powers herein granted or granted under law or to institute such action, suit or proceeding in its name and unless, also, there shall have been offered to the Trustee reasonable security and indemnity against the costs, etpenses and liabilities to be incurred therein or thereby, a^d the ''rustee shall have refused or neglected to comply sith such request within a reasonable time, and such notifi- cation, request and offer of indemnity are hereby declared in every such case, at the option of the Trustee, to be con- ditions precedent to the execution of the powers under this Resolution or for any other remedy hereunder or under law It is understood and intended that no one or more Holders of the Bonds hereby secured shall have any right in any manner whatever by his or their action to affect, disturb or pre- judice the security of this Resolution, or to enforce any right hereunder or under law with respect to the Bonds or this Resolution, except in the manner herein provided, and that all proceedings shall be instituted, had and maintained in the manner herein provided and for the benefit of all Holders of the Outstanding Bonds and coupons Anything to the contrary notwithstanding contained in this Section 1206, or any other provision of this Resolu- tion, each Holder of any Bond by his acceptance thereof shall be deemed to have agreed that any court in its discretior may require, in any suit for the enforcement of any right or remedy under the Resolution or any Supplemental+ Resolu- tion, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the reasonable costs of such suit and that such court may in its discretion assess reasonable costs, including reasonable attorneys fees, ag- ainst any party litigant in any such suit, having due regard to the merits and good faith of the claims or defenses made by such litigant; but the provisions of this paragraph shall not apply to any suit instituted by the Trustee, to any suit instituted by any Bondholder, or group of Bondholders, holding at least twenty-five percent (25%) in principal amount of the Bonds Outstanding, or to any suit instituted by any Bondholder for the enforcement of the payment of the principal or Redemption Price of or interest on any Bond on or after the respective due date thereof expressed in such Bond. 1207 Possession of Bonds by Trustee Not Required All rights of action under this Resolution or under any of the -74- 302 Bonds, enforceable by the Trustee, may be enforced by it without the possession of any of the Bonds or the coupons appertaining thereto or the production thereof on the trial or other proceeding relative thereto, and any such unit, action or proceeding instituted by the Trustee shall be brought in its name and for the benefit of all of the Holders of such Bonds and coupons, subject to the provisions of this Resolution 1208 Remedies Not Exclusive No remedy herein conferred upon or reserved to the Trustee or to Holders of the Bonds is intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now or hereafter existing at law or in equity or by statute 1209 No Waiver of Default No delay or omission of the Trustee or of any Holder of the Bonds to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein, and every power and remedy given by this Resolution to the Trustee and the Holders of the Bonds, respectively, may be exercised from time to time and as often as may be deemed expedient 1210 Notice of Event of Default. The Trustee shall give to the Bondholders notice of each Event of Default hereunder :mown to the Trustee within ninety (90) days after knowledge of the occurrence thereof, unless such Event of Default shall have been remedied or cured before the giving of such notice - provided that, except in the case of default in the payment of the principal, Redemption Price, if any, or interest on any of the Bonds, the Trustee shall be protected in withhold- ing such notice if and so long as the board of directors the executive committee, or a trust committee of directors or responsible officers of the Trustee in good faith deter- mines that the withholding of such notice is in the interests of the Bondholders Each such notice of Event of Default shall be given by the Trustee by mailing written notice thereof, (1) to all registered Holders of Bonds, as the names and addresses of such Holders appear on the books of regis- tration and transfer of Bonds as kept by the Trustee, and (2) to such Bondholders as have filed their names and addresses with the Trustee for that purpose -75- Imo 1 303 ARTICLE XIII EXECUTION OF INSTRUMENTS BY BONDHOLDERS AND PROOF OF OWNERSHIP OF BONDS 1301 Evidence of Signatures of Bondholders and Ownership of Bonds. Any request, direction, consent, revocation of consent, or other instrument in writing required or permitted by this Resolution to be signed or executed by Bondholders may be in any number of concurrent instruments or similar tenor, and may be signed or executed by such Bondholders in person or by their attorneys or agents appointed by an instru- ment in writing for that purpose or, in the case of coupon Bonds, by any bank, trust company or other depository of such Bonds Proof of the execution of any such instrument, or of any instrument appointing any such attorney or agent, and of the holding and ownership of Bonds shall be sufficient for any purpose of this Resolution (except as otherwise herein provided), if made in the following manner. (1) The fact and date of the execution by any Bondholder or his attorney or agent of any such instrument and of any instrument appointing any such attorney or agent may be proved by delivery of a certificate, which need not be acknowledged or verified, of an officer of any bank, trust company, or other depository or of any notary public, or other officer authorized to take acknowledgements :where any such instrument is executed by an officer of a corpora- tion or association or a member of a partnership, on behalf of such corporation, association or partnership, such certifi- cate shall also constitute sufficient proof of his authority (2) The fact of the holding of coupon Bonds by any Bondholder and the amount and the numbers of such Bonds and the date of his holding the same (unless such Bonds be registered) may be proved by a certificate executed by an officer of any bank, trust company, or other depository, if such certificate shall be deemed by the Trustee to be satis- factory, showing that at the date therein mentioned such person had on deposit with or exhibited to such bank trust company, or other depository the Bonds described in such certificate The Trustee may conclusively assume that such ownership continues until written notice of the contrary is served upon the Trustee The ownership of registered Bonds shall be proved by the registry books held by the Trustee under the provisions of this Resolution -76- 304 Nothing contained in this Article shall be construed as limiting the Trustee to such proof, it being intended that the Trustee may accept any other evidence of the matters herein stated which may seem sufficient Any request or consent of the Holder of any Bond shall bind every future Holder of the same Bond in respect of anything done or suffered to be done by the City, the Trustee or any Paying Agent in pursuance of such request or consent • -77- 1 305 ARTICLE XIV DEFEASANCE 1401 Defeasance (A) If the City shall pay or cause to be paid, or there shall otherwise be paid, to the Holders of the Bonds and coupons then Outstanding, the principal and interest and Redemption Price, if any, to become due thereon, at the times and in the manner stipulated therein and in this Resolution, then and in that event the covenants, agreements and other obligations of the City to the Bondholders shall be dis- charged and satisfied In such event, the Trustee shall, upon request of the City, execute and deliver to the City all such instruments as may be desirable to evidence such release and discharge and execute and deliver to the Servicer thereof assignments (which assignments shall be received by the Servicer as trustee of the City) of any Mortgage Loans held by the Trustee under this Resolution, and the Trustee and the Paying Agent shall pay over or deliver to the City all moneys or securities held by them pursuant to this Resolution which are not required for the payment or redemp- tion of Bonds or coupons not theretofore surrendered for such payment or redemption (B) Bonds or coupons or interest installments for the payment or redemption of which moneys shall then be held by the Trustee or the Paying Agents (through deposit by the City of funds for such payment or redemption or otherwise) whether at or prior to the maturity or the redemption date of such Bonds, shall be deemed to have been paid within the meaning and with the effect expressed in subsection (A) of this Section 1401 All Outstanding Bonds and all coupons appertaining to such Bonds shall, prior to the maturity or redemption date thereof, be deemed to have been paid within the meaning and with the effect expressed in subsection (A) of this Section 1401 if (i) in case any of said Bonds are to be redeemed on any date prior to their maturity, the City shall have given to the Trustee, in form satisfactory to it, irrevocable instruction to publish as provided in Article IV of this Resolution notice of redemption on said date of such Bonds, (ii) there shall have been deposited with the Trustee either moneys in an amount which shall be sufficient, or Federal Securities the principal and interest on which when due will provide moneys which together with the moneys, if any, deposited with the Trustee at the same time, shall -78- 30 be sufficient to pay when due the principal or Redemption Price, if applicable, and interest due and to become due on said Bonds on and prior to the redemption date or maturity date thereof, as the case may be, and (iii) in the event that said Bonds are not by their terms subject to redemp- tion within the next succeeding sixty (60) days, the City shall have given the Trustee in form satisfactory to it irrevocable instructions to publish, as soon as practicable, at least twice at an interval of not less than seven (7) days between publications, in an Authorized Newspaper a notice to the Holders of such Bonds and coupons that the deposit required by (ii) above has been made with the ^rus- tee and that said 3onds and coupons are deemed to have been paid in accordance with subsection (A) of this Section 1401 and stating such maturity or redemption date upon which moneys are to be available for the payment of the principal or Re- demption Price, if applicable, on said Bonds Neither Federal Securities nor moneys deposited with the Trustee pursuant to this Section nor principal or interest payments on any such Federal Securities shall be withdrawn or used for any pur- pose other than, and shall be held in trust for the payment of the principal or Redemption Price, if applicable, and interest on said Bonds• provided that any cash received from such principal or interest payments on such Federal Securities deposited with the Trustee if not then needed for ssch pur- pose, shall, to the extent practicable be reinvested in Federal Securities maturing at times and in principal amounts sufficient to pay when due the principal or Redemption Price, if applicable, and interest to become due on said Bonds or and prior to such redemption date or maturity date thereof, as the case may be, and interest earned from such reinvest- ments shall be paid over to the City as received by the Trustee free and clear of any trust, lien or pledge (C) Anything in this Resolution to the contrary notwithstanding, any moneys held by the Trustee or Paying Agents in trust for the payment and discharge of any of the Bonds or coupons which remain unclaimed for four (4) years after the date when such Bonds have become due and payable either at their stated maturity dates or by call for earlier redemption, if such moneys were held by the Trustee or Pay- ing Agents at such date, or for four (4) years after the date of deposit of such moneys if deposited with the Trustee or Paying Agents after the said date c*then such Bonds became due and payable, shall, at the written request of the City, be repaid by the Trustee or Paying Agents to the City, as its absolute property and free from trust, and the Trustee or Paying Agents shall thereupon be released and discharged with respect thereto and the Bondholders shall look only to -79- 1 1 1 307 the City for the payment of such Bonds and coupons; pro- vided, however, that before being required to make any such payment to the City, the Trustee or Paying Agent shall, at the expense of the City, cause to be published at least twice, at an interval of not less than seven (7) days be- tween publications, in an Authorized Newspaper, a notice that said ;Honeys remain unclaimed and that, after a date named in said notice, which date shall be not less than thirty (30) days after the date of the first publication of such notice, the balance of such moneys then unclaimed will be returned to the City -80- 308 ARTICLE XV FORMS AND EXECUTION OF BONDS AND COUPONS 1501 Forms of Bonds and Coupons of Bonds Bonds in coupon form and the coupons to be attached thereto, and Bonds in registered form, shall be of substantially the following forms and tenor with such additions thereto including but not limited to, redemption schedules and prices, interest rates and place or places of payment, all as otherwise pro- vided for in this Resolution No. (FORM OF COUPON BOND) City of Cypress, County of Orange, State of California Single Family Residential Mortgage Revenue Bond Issue of 1980 $5,000 KNOW ALL MEN BY THESE PRESENTS that the City of Cypress (hereinafter sometimes called the "City"), a public body, corporate and politic, organized and existing under, and by virtue of, the Constitution of the State of California and the Charter of the City of Cypress, for value received, hereby promises to pay, from the sources of funds hereinafter described, to the bearer or, if this Bond be registered as to principal, to the registered owner hereof, upon presenta- tion and surrender of this Bond, the principal sum of FIVE THOUSAND DOLLARS ($5,000) on the first day of January, , unless redeemed prior thereto as hereinafter provided, and to pay interest thereon from the date hereof to the date of maturity or earlier redemption of this Bond, at the rate of percent (% ) per annum, on January 1, 1981, and semiannually thereafter on the first day of July and the first day of January of each year, upon presentation and surrender of the attached coupons evidencing such interest as the same respec- tively become due Principal of and interest and redemption premium, if any, on this Bond are payable in lawful money of the United States of America, which, at the time of payment is legal tender for the payment of public and private debts, at the corporate trust office of Security Pacific National Bank, in the City of Los Angeles, State of California, or -81- 1 309 its successor, as trustee (herein called the "Trustee"), or, at the option of the Holder of this Bond, at the principal office of The Bank of New York, New York, New York, or Harris Trust and Savings Company, Chicago, Illinois, Paying Agents, except that principal and Redemption Price of regis- tered Bonds are payable at the corporate trust office of the Trustee in Los Angeles, California, and interest on fully registered bonds is payable by check or draft of the Trustee, under Resolution No. 2180, a Resolution of the City Council of the City of Cypress Authorizing the Issuance of Single Family Residential Mortgage Revenue Bonds, Issue of 1980, (herein called the "Resolution") adopted by the City on January 14, 1980 This Bond is a special obligation of the City and is one of a duly authorized issue of bonds of the City issued in the aggregate principal amount of $25,000,000, designated "Single Family Residential Mortgage Revenue Bonds, Issue of 1980" (herein called the "Bonds") issued under and pursuant to the Charter of the City of Cypress and Cypress Ordinance No. 650, entitled "An Ordinance of the City Council of the City of Cypress Providing for an Affordable Home Ownership and Rehabilitation Program and for the Issuance of Residential Mortgage Revenue Bonds in Connection with Said Program" (herein called the "Ordinance'), and under and pursuant to the Resolution. Copies of the Resolution are on file at the office of the City and at the corporate trust office of the Trustee, and reference to the Resolution and any and all supplements thereto and modifications and amendments thereof and to the Ordinance is made for a description of the pledges and covenants securing the Bonds; the nature, extent and manner of enforcement of such pledges, the rights and remedies of the bearers or registered owners of the Bonds with respect thereto and the terms and conditions upon which the Bonds are issued and may be issued thereunder To the extent and in the manner permitted by the terms of the Resolution, the provisions of the Resolution or any resolution amendatory thereof or supplemental thereto, may be modified or amended by the City, with the written consent of the holders of at least two-thirds in principal amount of the Bonds then outstanding This Bond is transferable by delivery except when registered as to principal otherwise than to bearer. It may be registered as to principal in the name of the owner on the bond register kept for that purpose at the corporate trust office of the Trustee, such registration to be noted hereon, after which no transfer hereof shall be valid unless made on said bond register by the registered owner in per- son, or by his attorney duly authorized in writing, and -82- 310 similarly noted hereon, but this Bond may be discharged from registration by being in like manner transferred to bearer, after which it shall again become transferable by delivery, and this Bond may again and from time to time be registered or discharged from registration in the same manner Regis- tration of this Bond shall not affect the negotiability of the coupons, which shall continue to be payable to bearer and transferable by delivery The Bonds are issuable in the form of coupon Bonds, registrable as to principal only, in the denomination of $5,000, and in the form of fully registered Bonds without coupons in the denomination of $5,000 or an integral multi- ple thereof, not exceeding the aggregate principal amount of Bonds maturing in the year of maturity of the Bond for which the denomination of the Bond is so specified Coupon Bonds, upon surrender thereof at the corporate trust office of the Trustee, with all unmatured coupons attached, may, at the option of the holder thereof, be exchanged for an equal aggregate principal amount of fully registered Bonds of the same maturity of any of the authorized denomination, in the manner, subject to the conditions, and upon the payment of the charges, if any, including after the first exchange, the cost of preparing a new Bond, provided in the Resolution In like manner, subject to such conditions and upon the payment of such charges, if any, including after the first exchange the cost of preparing a new Bond, fully registered Bonds upon surrender thereof at the corporate trust office of the Trustee with a written instrument of transfer satis- factory to the Trustee, duly executed by the registered owner or his attorney duly authorized in writing, may, at the option of the registered owner thereof, be exchanged for an aggregate principal amount of coupon Bonds, with appro- priate coupons attached, or of fully registered Bonds with- out coupons of any other authorized denominations, of the same maturity The Bonds maturing on and after January 1, 1991, are subject to redemption, at the option of the City and upon the giving of notice required by the Resolution, in whole, on January 1, 1990, or on any date thereafter, or in part pro rata by maturity, in the manner provided in the Resolu- tion and by lot within a maturity, on January 1, 1990, or on any interest payment date thereafter, at the respective redemption prices (expressed as percentages of the principal amount of the Bonds or portions thereof to be redeemed) set forth below, plus in each case accrued interest to the date of redemption: -83- 1 1 Period (Both Dates Inclusive) January 1, 1990 - December 31, 1992 January 1, 1993 - December 31, 1995 January 1, 1996 - December 31, 1998 January 1, 1999 and thereafter Redemption Prices 103% 102% 101% 100% The Bonds are also subject to special redemption in whole or in part pro rata by maturity, in the manner pro- vided in the Resolution, and by lot within a maturity at any time on or after January 1, 1983, at the principal amount thereof and accrued interest thereon, without premiam, from (i) certain unexpended proceeds of the Bonds and (ii) certain moneys in the residual fund, all as provided in the Resolution. The City reserves the right to determine that January 1, 1984, rather than January 1, 1983, shall be the date upon which the Bonds become subject to special redemp- tion pursuant to either or both of (i) and (ii) above In addition, if at any time on or after January 1, 1990 the sum of moneys (or investments which, when liquidated will pro- duce moneys) in the Debt Service Reserve Fund, Mortgage Reserve Fund, Principal Fund, Interest Fund, Sinking Fund, Prior Redemption Fund, and Residual Fund equals or exceeds the applicable redemption price of the then outstanding Bonds, plus unpaid accrued interest to the redemption data, the Bonds shall be redeemed from such moneys on any date in whole at the applicable redemption price set forth in the table above plus accrued interest to the redemption date The Bonds maturing on January 1, 2012, are also subject to mandatory redemption in part by lot on January 1, 1996 and on each January 1 thereafter to and including January 1, 2011, at the principal amount thereof plus accrued interest to the date of redemption thereof, without premium, from mandatory sinking fund installments which are required to be made in amounts sufficient to redeem on January 1 of each year the principal amount of such Bonds specified for each of the years below (unless any such principal amount shall be reduced as provided in the Resolution by reason of earlier redemption of Bonds): Year 1996 1997 1998 1999 2000 2001 2002 2003 2004 Amount Year Amount $ 555,000 2005 1,210,000 605,000 2006 1,315,000 660,000 2007 1,435,000 720,000 2008 1 565,000 785,000 2009 1,705,000 855,000 2010 1,860,000 935,000 2011 2,025,000 1,015,000 2012 (maturity) 2,210,000 1,110,000 -84- 312 In the event of the redemption of any or all of the Bonds, notice of such redemption (i) shall be given by pub- lication at least once in a newspaper of general circulation or financial paper in the City of Los Angeles, California, and in the Daily Bond Buyer or other financial paper or news- paper circulated in the City and State of New _Cork, each of which is published at least once a day for at least five (5) days (other than legal holidays) in each calendar weer, and is printed in the English language the first such publica- tion to be not less than twenty-five (25) days nor more than sixty (60) days prior to the redemption date, and (ii) shall be mailed postage prepaid, not less than twenty (20) days nor more than sixty (60) days prior to the redemption date to the registered owners of any Bonds or portions of Bonds to be redeemed and to owners of any bearer Bond to be redeemed who have filed their names and addresses and numbers of Bonds with the Trustee; provided, however, that such mailing shall not be a condition precedent to such redemption and failure so to mail any such notice shall not affect the validity of the proceedings for the redemption of Bonds Notice of redemption having been given, as aforesaid, Bonds or por- tions thereof so called for redemption shall become due and payable at the applicable redemption price herein provided, and from and after the date so fixed for redemption, inter- est on the Bonds or portions thereof so called for redemotior shall cease to accrue and become payable and the coucons for interest appertaining to coupon Bonds maturing subsequent to the redemption data shall be void This Bond shall not be deemed to constitute a debt of the City of Cypress, the State of California or any other political subdivision of the State nor a pledge of the faith and credit of the City of Cypress This Bond is a special obligation of the City, payable solely from payments made on mortgage loans purchased with the proceeds of Bonds and other moneys deposited in the revenue fund and the other funds and accounts pledged therefor in the Resolutions IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required by the Constitution of the State of California, the Charter of the City of Cypress the Ordinance, and the Resolution to exist, to have happened and to have been performed precedent to and in the issuance of this Bond, exist, have happened and have been performed in due time, form and manner as required by law and that the issuance of the Bonds, together with all other indebtedness of the City, is within every debt and other limit prescribed by law -85- 1 313 This Bond shall not be entitled to any benefit under the Resolution or become valid or obligatory for any purpose until it shall have been authenticated by the certificate of the Trustee endorsed hereon IN WITNESS WHEREOF, the City of Cypress caused this Bond to be executed in its name by the manual or facsimile signature of its Mayor or Llayor Pro Tempore and its corpo- rate seal (or a facsimile thereof) to be affixed imprinted, engraved or otherwise reproduced hereon, and attested by the manual or facsimile signature of its City Clerk and the interest coupons hereto attached to be executed by the facsimile signature of the City Clerk, all as of the 1st day of January, 1980 (SEAL) ATTEST. City Clerk CITY OF CYPRESS By Mayor -86- 314 (Form of Coupon) No $ THE CITY OF CYPRESS, on 1, , (unless the Bond hereinafter mentioned shall have been duly called for previous redemption and payment of the redemption orice made or duly provided for) will pay to bearer DOLLARS ($ ) in any coin or currency which, on the date of payment hereof, shall be legal tender for the payment of public and private debts, at the corporate trust office of Security Pacific National Bank, in the City of Los Angeles, State of California, or, at the option of the holder of this Bond, at The Bank of New York, New York, New York, or Harris Trust and Savings Company, Chicago, Illinois, upon presentation and surrender of this coupon, being the interest then due on its Single Family Residential Mortgage Revenue Bond, Issue of 1980, dated January 1, 1980, No. CITY OF CYPRESS By City Clerk (Form of Certificate of Registration) This Bond is registered in the name of the registered owner last entered below and the principal thereof is payable only to such owner, coupons evidencing interest remaining payable to bearer; provided that this Bond may be registered to bearer and thereby discharged from registration and the negotiability hereof restored NOTE: There must be no writing in the space below except by the Trustee Date Name of Address of Signature of Registry Registered Owner Registered Owner Trustee -87- e B 1 f^_F2 31 5 j } 9� ) (Form of Certificate of Authentication) This Bond is one of an issue described in the Resolution within mentioned. SECURITY PACIFIC i1A""IONAL BANK, as Trustee By Authorized Officer -88- 316 No R (FORM OF REGISTERED BOND) City of Cypress, County of Orange, State of California Single Family Residential Mortgage Revenue Bond Issue of 1980 KNOW ALL MEN BY THESE PRESENTS that the City of Cypress (hereinafter sometimes called the "City") a public body, corporate and politic, organized and existing under, and by virtue of, the Constitution of the State of California and the Charter of the City of Cypress, for value received, hereby promises to pay, from the sources of funds herein- after described, to or registered assigns, the principal sum of THOUSAND DOLLARS ($ ) on the first day of January, , unless redeemed prior thereto as hereinafter provid- ed, upon the presentation and surrender hereof at the corpo- rate trust office of Security Pacific National Bank, in the City of Los Angeles, State of California, or its successors, as trustee (herein called the "Trustee") under Resolution No 2180, 'A Resolution of the City Council of the City of Cypress Authorizing the Issuance of Single Family Residential Mortgage Revenue Bonds, Issue of 1980", (herein called the "Resolution") adopted by the City on January 14, 1980 and to pay to the registered owner hereof by check or draft of the 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 first day of January and the first day of July of each year (provided, however, that such interest will accrue but not be payable during calendar year 1980) Principal of and interest and redemption premium, if any, on this Bond are payable in lawful money of the United States of America which at the time of payment is legal tender for the payment of public and private debts This Bond is a special obligation of the City and is one of a duly authorized issue of bonds of the City issued in the aggregate principal amount of $25,000,000 denigrated "Single Family Residential Mortgage Revenue Bonds, Issue of 1980" (herein called the "Bonds"), issued under and pursuant to the Charter of the City of Cypress and Cypress Ordinance No 650, entitled "An Ordinance of the City Council of the -89- 1 1 317 City of Cypress Providing for an Affordable Home Ownership and Rehabilitation Program and for the Issuance of Residen- tial Mortgage Revenue Bonds in Connection with Said Program" (herein called the "Ordinance"), and under and pursuant to the Resolution Copies of the Resolution are on file at the office of the City and at the corporate trust office of the Trustee, and reference to the Resolution and any and all supplements thereto and modifications and amendments thereof and to the Ordinance is made for a description of the pledges and covenants securing the Bonds• the nature, extent and manner of enforcement of such pledges; the rights and remedies of the bearers or registered owners of the Bonds with respect thereto and the terms and conditions upon which the Bonds are issued and may be issued thereunder To the extent and in the manner permitted by the terms of the Resolution, the provisions of the Resolution or any resolution amendatory thereof or supplemental thereto, may be modified or amended by the City, with the written consent of the holders of at least two-thirds in principal amount of the Bonds then outstanding This Bond is transferable, as provided in the Resolu- tion only upon the bond register kept for that purpose at the corporate trust office of the Trustee by the registered owner hereof in person, or by his attorney duly authorized in writing, upon the surrender of this Bond together with a written instrument of transfer satisfactory to the r"rustee duly executed by the registered owner or his attorney duly authorized in writing, and thereupon a new registered Bond or Bonds, without coupons, and in the same aggregate principal amount and of the same maturity, shall be issued to the transferee in exchange therefor as provided in the Resolu- tion, and upon the payment of the charges, if any, includ- ing, after the first exchange, the cost of preparing new Bonds, therein prescribed The Bonds are issuable in the form of coupon Bonds registrable as to principal only, in the denomination of $5,000, and in the form of fully registered Bonds without coupons in the denomination of $5,000 or any integral multi- ple thereof, not exceeding the aggregate principal amount of Bonds maturing in the year of maturity of the Bond for which the denomination of the Bond is so specified Coupon Bonds, upon surrender thereof at the corporate trust office of the Trustee, with all unmatured coupons attached, may at the option of the holder thereof, be exchanged for an equal aggregate principal amount of fully registered Bonds of the same maturity of any of the authorized denominations, in the manner, subject to the conditions, and upon the payment of the charges, if any, including after the first exchange -90- 3`18 the cost of preparing a new Bond provided in the Resolu- tion In like manner, subject to such conditions and upon the payment of such charges, if any, including after the first exchange the cost of preparing a new Bond, fully registered Bonds, upon surrender thereof at the corporate trust office of the Trustee with a written instrument of transfer satisfactory to the Trustee, duly executed by t',e registered owner or his attorney duly authorized in writing may, at the option of the registered owner thereof be exchanged for an equal aggregate principal amount of couoor Bonds, with appropriate coupons attached, or of fully reg- istered Bonds without coupons of any other authorized denom- inations, of the same maturity The Bonds maturing on and after January 1, 1991 are subject to redemption, at the option of the City and upon the giving of notice required by the Resolution, in whole on January 1 1990, or on any date thereafter, or in part pro rata by maturity, in the manner provided in the Resolu- tion and by lot within a maturity, on January 1, 1990, or on any interest payment date thereafter, at the respective redemption prices (expressed as percentages of the principal amount of the Bonds or portions thereof to be redeemed) set forth below plus in each case accrued interest to the date of redemption. Period (Both Dates Inclusive) Redemption Prices January 1, 1990 - December 31, 1992 January 1, 1993 - December 31, 1995 January 1, 1996 - December 31, 1998 January 1, 1999 and thereafter 103% 102% 101% 100% The Bonds are also subject to special redemption in whole or in part pro rata by maturity, in the manner provided in the Resolution, and by lot within a maturity, at any time on or after January 1, 1983, at the principal amount thereof and accrued interest thereon, without premium, from (i) certain unexpended proceeds of the Bonds and (ii) certain moneys in the residual fund, all as provided in the Resolu- tion The City reserves the right to determine that January 1, 1984, rather than January 1, 1983, shall be the date upon which the Bonds become subject to special redemption pursuant to either or both of (i) and (ii) above In addition, if at any time on or after January 1, 1990 the sum of moneys (or investments which, when liquidated will produce moneys) in the Debt Service Reserve Fund, Mortgage Reserve Fund, Prin- cipal Fund, Interest Fund, Sinking Fund Prior Redemption Fund, and Residual Fund equals or exceeds the applicable redemption price 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 the applic- able redemption price bet forth in the table above plus accrued interest to the redemption date -91- 1 1 1 The Bonds maturing on January 1, 2012, are also'-j5ct to mandatory redemption in part by lot on January 1, 1996, and on each January 1 thereafter to and including January 1, 2011, at the principal amount thereof plus accrued interest to the date of redemption thereof, without premiam, from mandatory sinking fund installments which are required to be made in amounts sufficient to redeem on January 1 of each year the principal amount of such Bonds specified for each of the years below (unless any such prircipal amount shall be reduced as provided in the Resolution by reason of earlier redemption of Bonds). Year Amount Year Amount 1996 555,000 2005 1,210,000 1997 605,000 2006 1,315,000 1998 660,000 2007 1,435,000 1999 720,000 2008 1 565,000 2000 785,000 2009 1,705,000 2001 855,000 2010 1,860,000 2002 935,000 2011 2,025,000 2003 1,015,000 2012 (maturity) 2,210,000 2004 1,110,000 In the event of the redemption of any or all of the Bonds, notice of such redemption (i) shall be given by pub- lication at least once in a newspaper of general circulation or financial paper in the City of Los Angeles, California, and in the Daily Bond Buyer or other financial paper or news- paper circulated in the City and State of New _Cork, each of which is published at least once a day for at least five (J) days (other than legal holidays) in each calendar week, and is printed in the English language, the first such publica- tion to be not less than twenty-five (25) days nor more than sixty (60) days prior to the redemption date, and (ii) shall be mailed postage prepaid, not less than twenty (20) days nor more than sixty (60) days prior to the redemption date to the registered owners of any Bonds or portions of Bonds to be redeemed and to owners of any bearer Bond to be redeemed who have filed their names and addresses and numbers of Bonds with the Trustee• provided, however, that such mailing shall not be a condition precedent to such redemption and failure so to mail any such notice shall not affect the validity of the proceedings for the redemption of Bonds Notice of redemption having been given, as aforesaid, Bonds or por- tions thereof so called for redemption shall become due and payable at the applicable redemption price herein provided, and from and after the date so fixed for redemption inter- est on the Bonds or portions thereof so called for redemption shall cease to accrue and become payable and the coupons for interest appertaining to coupon Bonds maturing subsequent to the redemption date shall be void -92- - This Bond shall not be deemed to constitute a debt of the City of Cypress, the State of California or any other political subdivision of the State nor a pledge of the faith and credit of the City of Cypress This Bond is a special obligation of the City, payable solely from payments �made on mortgage loans purchased with the proceeds of Bonds and other moneys deposited in the revenue fund and the other funds and accounts pledged therefor in the Resolution IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required by the Constitution of the State of California, the Charter of the City of Cypress, the Ordinance, and the Resolution to exist, to have happened and to have been performed precedent to and in the issuance of this Bond, exist, have happened and have been performed in due time, form and manner as required by law and that the issuance of the Bonds, together with all other indebtedness of the City, is within every debt and other limit prescribed by law This Bond shall not be entitled to any benefit under the Resolution or become valid or obligatory for any purpose until it shall have been authenticated by the certificate of the Trustee endorsed hereon. IN WITNESS WHEREOF, the City of Cypress caused this Bond to be executed in its name by the manual or facsimile signature of its Mayor or Mayor Pro Tempore and its corpo- rate seal (or a facsimile thereof) to be affixed, imprinted, engraved or otherwise reproduced hereon, and attested by the manual or facsimile signature of its City Clerk all as of the 1st day of (SEAL) ATTEST. City Clerk CITY OF CYPRESS By Mayor -93- 1 1 321 (Form of Certificate of Authentication) "'his Bond is one off an issue described in the Resolu- tion within mentioned SECURITY PACIFIC NATIOI AL SANK, as Trustee By Authorized Officer (Form of Assignment) ASSIGNMENT For value received the undersigned do(es) hereby sell, assign and transfer unto the within -mentioned Registered Bond and hereby irrevocably constitutE.(s) and appoint(s) attorney, to transfer the same on the books of the Trustee with full power of substitution in the premises Dated: Note The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within Registered Bond in every particular without altera- tion or enlargement or any change whatsoever -94- 322 ARTICLE XVI MISCELLANEOUS 1501 Preservation and Inspection of Documents All documents received by the Trustee or ary Paying Agent under the provisions of this Resolution shall be retained in its possession and shall be subject at all reasonable times to the inspection of the City, the Trustee, or any Paying Agent, and, upon written request of not less than five per- cent (5%) in principal amount of the Holders of the Out- standing Bonds, Bondholders and their agents and represen- tatives, any of whom may make copies thereof 1602 Destruction of Bonds and Coupons. Any Bonds pur- chased or redeemed by the Trustee under this Resolution shall be cancelled by the Trustee Whenever in this Resolution provision is made for the cancellation by the Trustee and the delivery to the City of any Bonds or any coupons, in- cluding Bonds cancelled under the first sentence of this Section, the Trustee may, upon request of the City (evi- denced by an Officer's Certificate), in lieu of such cancel- lation and delivery, destroy such Bonds and coupons (in the presence of an officer of the City, if the City shall so require), and deliver a certificate of such destruction to the City 1603. Parties of Interest Nothing in this Resolution, expressed or implied, is intended to or shall be construed to confer upon or to give any person or party other than the City, Trustee, Paying Agents and the Holders of the Bonds and coupons appertaining thereto any rights, remedies or claims under or by reason of this Resolution or any coven- ant, condition or stipulation thereof• and all covenants, stipulations, promises and agreements in this Resolution contained by or on behalf of the City shall be for the sole and exclusive benefit of the City, Trustee and Pay- ing Agents and the Holders from time to time of the Bonds and the coupons appertaining thereto. 1604 No Recourse Under Resolution or on Bonds All covenants, stipulations, promises, agreements and obliga- tions of the City contained in this Resolution shall be deemed to be the covenants, stipulations, promises, agree- ments and obligations of the City and not of any member officer or employee of the City in his individual capacity, and no recourse shall be had for the payment of the princi- pal or Redemption Price of or interest on the Bonds or for any claim based thereon or on this Resolution against any member, officer or employee of the City or any person ex- ecuting the Bonds • -95- 1 323 1605 Survival of Covenants. The obligation of the City under Section 807 shall survive payment and cancella- tion of the Bonds and defeasance pursuant to Section 1401 1606. Restriction on Purchase of Bonds by Qualified Mortgage Lenders Any person (or any related person, as defined in Section 103(b)(6)(C) of the Internal Revenue Code of 1954, as amended), from whom the City may, under the Residential Mortgage Financing Program, acquire Mortgage Loans shall not, pursuant to an arrangement, formal or informal, purchase any of the Bonds 1607. Severability If any one or more of the covenants, stipulations, promises, agreements or obligations provided in this Resolution on the part of the City, Trustee or any Paying Agent to be performed should be determined by a court of competent jurisdiction to be contrary to law, then such covenant or covenants, stipulation or stipulations, promise or promises, agreement or agreements, or obligation or obliga- tions shall be deemed and construed to be severable from the remaining covenants, stipulations, promises, agreements and obligations herein contained and shall in no way affect the validity of the other provisions of this Resolution 1608 Headings Any headings preceding the text of the several Articles and Sections hereof, and any table of con- tents or marginal notes appended to copies hereof, shall be solely for convenience or reference and shall not constitute a part of this Resolution, nor shall they affect its mean- ing, construction or effect 1609. Conflict All resolutions or parts of resolutions or other proceedings of the City in conflict herewith shall be and the same are repealed insofar as such conflict exists 1610. Effective Date This Resolution shall take effect immediately upon its adoption. PASSED AND ADOPTED by the City Council of the City of Cypress at a regular meeting held on the 14th day of January 1980 ATTEST: e7,146 MAYOR OF T E CITY OF CYPRESS CITY,CLERK T CI 1' OF CYPRESS -96- 324 .. STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SS I, DARRELL ESSEX, City Clerk of the City of Cypress, DO HEREBY CERTIFY that the foregoing Resolution was duly adopted at a regular meeting of the said City Council held on the 14th day of January 1980, by the following roll call vote AYES: 5 COUNCIL MEMBERS. Evans, Hudson, Lacayo, MacLain and Rowan NOES. 0 COUNCIL MEMBERS• None ABSENT: 0 COUNCIL MEMBERS. None 1 CITY -CLERK OF THE CITY OF CYPRESS The duties and obligations herein imposed upon the Trustee and the other provisions hereof relating to the Trustee are agreed to and accepted SECURITY PACIFIC NATIONAL BANK BY: /s/ D.R. McEachren By /s/ F Carr Dated 1-24-80 NOTE• Resolution with original signatures for Security Pacific National Bank is on file in the City Clerk's Office - 97