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HomeMy WebLinkAboutCity Council - 97-21 RESOLUTION NO. 9 7-21. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH APPROVING A SECOND SUPPLEMENTAL INDENTURE OF TRUST AND A SECOND AMENDMENT TO LOAN ORIGINATION AND SERVICING AGREEMENT,AND AUTHORIZING AND DIRECTING THE EXECUTION AND DELIVERY THEREOF AND OF OTHER DOCUMENTS AND ACTIONS TO BE TAKEN IN CONNECTION THEREWITH WHEREAS, the City of Huntington Beach (the "Issuer") has issued its Variable Rate Demand Multifamily Housing Revenue Bonds (Mercury Savings and Loan Association/Village Partnership Project) 1986 Series A in the aggregate principal amount of $7,700,000(the 'Bonds") pursuant to an Indenture of Trust,dated as of November 1,1986,,as amended by that certain First Supplemental Trust Indenture, dated as of June 1, 1989 (collectively, the "Original Indenture"), each by and between the Issuer and First Trust National Association, as successor trustee to First Trust Washington,the successor in interest to Seattle-First National Bank (the "Trustee");and WHEREAS, the Issuer entered into a Loan Origination and Servicing Agreement, dated as of November 1, 1986, as amended by that certain First Amendment to Loan Origination and Servicing Agreement (collectively, the "Original Loan Agreement"), with the Trustee, the Developer and Mercury Savings and Loan Association, a California chartered savings and loan association (the "Original Association"), pursuant to which the Issuer agreed to use the proceeds of the Bonds to make a loan (the "Developer Loan") to Village Partnership,a California general partnership (the "Developer"),to finance the cost of acquiring; constructing and improving a multifamily residential project located within the City of Huntington Beach, commonly known as Huntington Village Apartments (the "Project"),which Developer Loan would be originated by the Original Association;and WHEREAS, in connection with the Developer Loan, and in accordance with a Letter of Credit and Reimbursement Agreement (the "Reimbursement Agreement"), dated as of November 1, 1986, by and among the Developer, the Trustee and the Original Association, the Original Association delivered as security for the Bonds a letter of credit (the "Letter of Credit") against which the Trustee is entitled to draw to pay,when and as due, the principal of and interest on the Bonds, which Letter of Credit was secured by certain collateral (the "Collateral") assigned to Seattle-First National Bank, as Collateral Agent (the "Collateral Agent") for the benefit of the Issuer and the Trustee pursuant to an Assignment of Collateral and Trust Agreement,dated as of November 1,1986,by and among the Original Association, the Trustee and the Issuer (the "Collateral Agreement"); and WHEREAS,in connection with issuance of the Letter of Credit,the Developer further executed and delivered (i) its Letter of Credit Note in the principal amount of $7,700,000 in favor of the Original Association (the "Note"), and (ii) as security for its obligations under the Note and Reimbursement Agreement, a Deed of Trust with Assignment of Rents and Security Agreement with Fixture Filing, dated as of November 1, 1986, which created a first 1 4:PCD-Resolut Village yl"7 lien on the Project and named the Original Association and the Trustee as co-beneficiaries (the "Deed of Trust"); and WHEREAS, a partial redemption of the Bonds occurred on March 15, 1990 and the aggregate principal amount of the Bonds currently outstanding is $6,700,000,and WHEREAS, the Office of Thrift Supervision (the "OTS"), by its Order No. 90-952, dated May 25, 1990, appointed the Resolution Trust Corporation (the "RTC") as Receiver of the Original Association,and WHEREAS, by Order No. 90-953, dated May 25, 1990, the OTS authorized the organization of Mercury Federal Savings & Loan Association (the "New Association"), and thereafter, the RTC as Receiver of the Original Association and the New Association, entered into a certain Purchase and Assumption Agreement, dated May 25, 1990, pursuant to which certain assets and liabilities of the Original Association,including the Letter of Credit and all documents contemplated therein or executed in connection therewith, were transferred to the New Association; and WHEREAS, by Order No. 90-954, dated May 25, 1990, the OTS appointed the RTC as Conservator of the New Association;and WHEREAS, the OTS by its Order No. 90-1768, dated September 21, 1990,replaced the Conservator of the New Association with the RTC as Receiver of the New Association for the purpose of liquidation;and WHEREAS, on January 1, 1996, the Federal Deposit Insurance Corporation (the "FDIC"), acting in its capacity as Receiver for the New Association, succeeded to the RTC in its capacity as Receiver for the New Association pursuant to 12 U.S.C. Section 1441a(m)(1); and WHEREAS,as a result,the FDIC is the secured creditor of the Developer with respect to the Note and the Deed of Trust;and WHEREAS, Section 602.(e) of the Original Indenture provides that the Bonds are subject to redemption by the Issuer on any date, at a price equal to the principal amount of Bonds redeemed plus interest accrued thereon to the date fixed for redemption,which is not more than 22 days prior to and not later than the date of expiration of any Letter of Credit, unless the Trustee receives a renewal or extension of or replacement for such Letter of Credit meeting the requirements of Section 5.8 of the Loan Agreement not less than forty (40) days before the expiration of such Letter of Credit;and WHEREAS,the Developer and the FDIC desire to cause the Bonds to be purchased in lieu of the above-described redemption by causing a drawing under the Letter of Credit for the full redemption price of the Bonds which amount will be used to purchase the Bonds in lieu of such redemption;and WHEREAS, following the honor of the draw on the Letter of Credit, the Collateral shall be released from the Trust Estate;and 2 WHEREAS, pursuant to Section 1001 of the Original Indenture, the parties to the Original Indenture desire to amend and supplement the Original Indenture for the purpose of making changes which do not materially adversely affect the interests of the owners of the Bonds, subject to the written consent of the FDIC and the Developer, as provided in Section 1003 of the Original Indenture, by granting an option to purchase the Bonds in lieu of redemption thereof on or before expiration of the Letter of Credit (the "Purchase Option") and allowing the Letter of Credit to be renewed no later than ten (10) days before its termination without causing a mandatory redemption of the Bonds;and WHEREAS,upon receipt by the Trustee and the Issuer of the written direction of the sole Bondholder, the Trustee and the Issuer desire to further amend and supplement the Original Indenture, pursuant to Section 1002 of the Original Indenture, as set forth in that certain Second Supplemental Indenture of Trust (the "Second Supplemental Indenture"), subject to the further written consent of the Developer;and WHEREAS,in connection with amendment of the Original Indenture pursuant to the Second Supplemental Indenture, it is necessary to amend the Original Loan Agreement pursuant to that certain Second Amendment to Loan Origination and Servicing Agreement (the "Second Amendment to Loan Agreement") by and among the Issuer, the FDIC, the Developer and the Trustee;and WHEREAS, all things necessary to make the Second Supplemental Indenture of Trust and the Second Amendment to Loan Agreement valid, binding and effective have, in all respects, occurred; NOW,THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH AS FOLLOWS: SECTION 1. Second Supplemental Indenture. The Second Supplemental Indenture between the Issuer and the Trustee, in the form presented to this meeting, is hereby approved. The City Administrator or the Deputy City Administrator of the Issuer (the "Designated Officers") are,and each of them acting alone is,hereby authorized and directed, for and in the name and on behalf of the Issuer, to execute and deliver the Second Supplemental Indenture, and the City Clerk is hereby authorized and directed, for and in the name of and on behalf of the Issuer, to attest the Designated Officer's signature on the Second Supplemental Indenture, in substantially said form, with such additions thereto or changes therein as are recommended or approved by such officers upon consultation with bond counsel to the Issuer,including such additions or changes as are necessary or advisable in accordance with Section 3 hereof, the approval of such additions or changes to be conclusively evidence by the execution and delivery by the Issuer of the Second Supplemental Indenture. SECTION 2. Second Amendment to Loan Agreement. The Second Amendment to Loan Agreement, among the Issuer, the FDIC, the Developer and the Trustee, in the form presented to this meeting, is hereby approved. The Designated Officers are, and each of them acting alone is, hereby authorized and directed, for and in the name and on behalf of the Issuer, to execute and deliver the Second Amendment to Loan Agreement, and the City 3 Clerk is hereby authorized and directed,for and in the name of and on behalf of the Issuer, to attest the Designated Officer's signature on the Second Amendment to Loan Agreement, in substantially said form, with such additions thereto or changes therein as are recommended or approved by such officers upon consultation with bond counsel to the Issuer, including such additions or changes as are necessary or advisable in accordance with Section 3 hereof, the approval of such additions or changes to be conclusively evidence by the execution and delivery by the Issuer of the Second Amendment to Loan Agreement. SECTION 3. Official Action. The Designated Officers,any and all other officials of the Issuer or such other person designated by the Issuer are hereby directed, for and on behalf of the Issuer,to do any and all things and take any and all actions,including,without limitation, the execution and delivery of any and all amendments or supplements to the documents executed and delivered by the Issuer in connection with the issuance of the Bonds, including but not limited to, any supplements or amendments to the Original Indenture and the Original Loan Agreement, any and all assignments, certificates, agreements, notices, consents, instruments of conveyance and other documents, which they, or any of them,on the advice of bond counsel to the Issuer,may deem necessary or advisable in order to effect the supplement to the Original Indenture and the Original Loan Agreement, as provided herein, and any and all assignments, certificates, agreements, notices,consents,instruments of conveyance and other documents which may be required in connection with the purchase of all, or a portion, of the Bonds, at the time of execution and delivery of the above-referenced amendments or at such later date in lieu of redemption, which they,or any of them, on the advise of bond counsel to the Issuer,may deem necessary or advisable in connection with the amendments of the Original Indenture and the Original Loan Agreement,as provided herein. PASSED, APPROVED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on this 17th day of March, 1997, by the following votes: AYES: Julien, Harman, Dettloff, Bauer, Sullivan, Green, Garofalo NOES: None ABSENT: None ABSTAIN: None Agt"A---' Mayor ATTEST: APPROVED AS TO IDRM: L� - City Clerk iQr City Attorney 4 Res. No. 97-21 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) I, CONNIE BROCKWAY,the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at a regular meeting thereof held on the 17th day of March, 1997 by the following vote: AYES: Julien, Harman, Dettloff, Bauer, Sullivan, Green, Garofalo NOES: None ABSENT: None City Clerk and ex-officio Clerk of the City Council of the City of Huntington Beach, California OresolutUresbkpg/97-11