HomeMy WebLinkAboutSINGLE FAMILY MORTGAGE REVENUE BONDS - 1984-03-05 RESOLUTION NO. 5359
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF HUNTINGTON BEACH AUTHORIZING
EX_ECU'1ION OF PROGRAM DEPOSIT AGREEMENTS
AND PROVIDING OTHER MATTERS PROPERLY
RELATING THERETO
CITY OF HUNTINGTON BEACH
HOME MORTGAGE REVENUE BONDS
RESOLVED, by the City Council of the City of Huntington Beach,
California, as follows
WHEREAS, Chapters 1-5 of Part 5 of Divis4on 31 of the Health
and Safety Code of the State of California (herein called the "Act")
authorizes cities and counties to issue revenue bonds for the purpose
of financing home mortgages authorized by the Act, and the Act pro-
vides a complete, additional and alternative method for doing the
things authorized thereby;
WHEREAS, pursuant to the Act, the City is authorized to carry out
the public purposes described. therein by issuing its revenue bonds
to acquire home mortgages and by pledging such home mortgages as is
security for payment of the principal of and interest on such revenue
bonds, and by entering into any agreements in connection therewith;
WHEREAS, the City has heretofore undertaken and proposed to
continue a Home Mortgage financing Program (the "program") to purchase
loans (the "Home Mortgages") made to finance new and existing single-
family owner-occupied residential units (the "Homes") wi.thin the City
and to issue Rome Mortgage Revenue Bonds (the "Bonds") to finance the
purchase of additional Home Mortgages;
WHEREAS, to obtain an allocation to issue: the Bonds within,;the
federally imposed limit upon the issuance of mortgage subsidy bonds,
the City. has filed, pursuant to the Costa-Marks Housing Bor, i Allocation
Act of 1981,, as amended (the "Costa-Marks Act") , a notice of sale of
the principal amount of the proposed Bonds with the State Mortgage
Bond Allocation Committee;
WHEREAS, in addition, in order for the City to obtain such an
allocation, the City has caused evidence of 'the deposit of an amount
of money or letters of credit securing such amount, which is subject
to forfeiture and application by the City to assist housing for persons
of low and moderate income within the City upon the failure to sell
any or only a portion of the Bonds, and Y.
WHEREAS, developers within the City desire to provide the deposit
required to' be _made in order for the City to obtain such an allocation,
such deposit to be subject to the :germs and co,iditions describe: in
the Program Deposit Agreement in form ;presented to and reviewed by r
the ,City Council.:: with the aid of its staff;'
NOW, THEREFORE, IT IS. HEREBY FOUND, DETERMINED AND ORDERED, as
follows:
_,_...
1. The Program Deposit Agreements in form presented at this
meeting are hereby approved for execution and the City
Administrator is hereby authorized and directed to execute
the Program Deposit Agreements on behalf' of the City,with
the developers desiring to participate in the City's Program
on the terms and conditions therein provided.'
2. The staff of the City is authorized and directed to continue
Further implementation of the Ci'ty's oire bioftgage Finan. ing
Program.
PASSED AUD ADOPTED THIS 5th day of March 1984.
ATTEST:
City Clerk - � ,
APPROVED AS TO FORM: INITIATED AND APPROVED`AS TO
CONTENT: 4
city Alitorney ecial projects Coordinator
APPROVED `
r
Gity Administrator
�';4N
� s. No. 5359
STAT `OB CALIFORNIA )
COUNT:' OF ORANGE ) so:
CITY DF 11MINIVON BEACH
I; ALICIA M. WENTWORTH, the duly elected, qualified City
Clerk of the City cf Huntington Beach, and ex-officio Clerk of the
City Cuanci'l 4f said City, do hereby certify that the whole number of
members of the City Council of the City of Hunt• agton beach is seven, `
t
t1.at the foregoing resolution was passed and adopted by the affirmative
vote of more than a majority of a ' the members of said City Council
at a, regular meeting therec£ held on the 5th day.
of March , 1984 , by the following vote: a
AYES: Councilmen: r
Thoiras,_Patti_ns on, _Kelly, MacAllister, Finley, Bailey
T
NOES: Councilmen:
None
r
ABSENT: Councilmen: ,
Mandi c_
r
City Clerk and ex.-officio Clerk
of the City Council of the City y
of Huntington Beach, California
t
w
& � 96
REQUEt FOR CITY COUN tL ACTION RH 84-5
Date February 16, 1984
Submitted Honorable Mayor and City Council
Submitted ley: Charles W. Thompson, City Administrator" $ �.�� GQ
'Prepared by: Chart Spencer, Special Projects Coor rTTV- ;
Subject: APPRO\ v OF PROGRAM DEPOSIT AGREEMENT AND R S_GL- T_1171i��
AUTHORIZING EXECUTION THEREOF
Statement of Issue,Recommendation,Analysis, Funding Source,Alternative Actions,Attachments:
STATEMENT OF ISSUE: `
The City's financing team is moving forward with the preparation of the
City's Single Family Mortgage Revenue Bond Issue of 1984. At this time
three developers have made a -Firm commitment to participate in this bond
issue, and it is now necessary to execute the attached program deposit
agreement and resolution to facilitate receipt of the required one-half of
1 percent program deposit from these developers;
RECOMMENDATION:
NE
Approve and authorize the City Clerk to execute Resolution No.
and approve the attendant program deposit agreements with Mola Development
Corp,, The William Lyon Company, and Westfield Huntington Company.
ANALYSIS:
On February 16, 1984, the City received word that the State's`Mortgage
Bond Allocation Committee had awarded to the City a provisional allocation
for a $20 million sinqle family mortgage revenue bond sale during 1984.
When the United St%tes Congress takes action to lift the sunset on the
legislation which authorizes the City to issue such bonds, the City will
have just 90 days to market and close this bond issue.
z
Since this is an extremely limited amount of tigia to prepare and sell a
bond issue, City staff along with the other members of the financing team
will move ahead with the structure of this transaction and l_eparation of
the necessary documents. Accomplishment of these steps at this time will f
allow the City the greatest amount of flexibility in marketing and clo_ing
the issue once the 90-day period has begun and will help assure that the
mortgage resultant from this bond issue will be at the lowest possible
rate. Approval of the attached resolution and program deposit agreement
will secure the commitment of the three participating developers so that
preparation of the remaining documents may commence.
Single faM ley mortgage revenue bonds provide a mortgage pool at below
Market znerPst rates for 'the purchase of new homes by moderate income
first-time buyers. The City sold a similar bond issue totaling
$ a million 10 calendar year 1983.
P(d 4101
}
,k
RH 84-6
February 16, 1984
Page 2'
FUNDING 'SOURCE:
Financing teainw and consultants paid from bond proceeds. No budget impact.
ALTERNATI - ACTI.Oii
Do not approve the attached resolution and program deposit agreement
(failure`to approve 'these'documents at this time will jeopardize the
C .y's ability to consummate this financing)
ATTACHMENTS:`
Resolution NC. �
Program Deposit Agreement'
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=� g2H HHW: ea CH: `01/10/83
CITY OF HUNTINGTON BEACH
HOME MORTGAGE REVENUE BONDS 1
PROGRAM DEPOSIT AGREEMENT
ds " Program�Deposit Agreement (the "Agreement") is entered into this
ay of t%/ a�-, 1984. by and between the City of Huntington Beach (the
'City') and , ='" .° ; , rrthe "Developer"):
WITNES 'SETH:
WHEREAS, Chapters 1-5 of Part 5 of Division 31 of the Health and Safety Code
of the State or California (herein cal i ed the "Act") ,authorizes cities anc+ counties
to issue revenue bonds for the purpose of -financing home mortgages authorized by
the Act, and the Act provides a complete, additions? and alternative method for'.
doing the things authorized thereby;
WHEREAS, pursuant to theAct, the 'City is authorized to carry out the public
purposes described therein by i>suir;g its revenue bonds to acquire home mortgages
and by pledging such home mortgages as security for payment of the principal of and
interest on such revenue bonds, and by entering into any agreements in connection '
therew4 t:h
WHEREAS, the C-,ty has heretofore undertaken and proposes to continue its
Home. Mortgage Financing Program (the "Program") to purchase loans (the "Home ;
Mortgages") made to finance new, and existing single-family owner-occupied:
residential units (the "Homes") within the City, and to issue Home Mortgage Revenue
Bonds (the "Bonds") to finance the purchase of additional Home Mortgages,-
WHEREAS, the Developer is in the process of subdividing land within the City
and intends to construct and market new single-family residential units thereon and
desires to reserve a portion of the proceeds of the Bonds to provide funds to
purrlhase�Home Mortgages made With respect thereto;
WHEREAS, in order to obtain an allocation to issue the 'Bonds within the
federally imposed limit upon the issuance of mortgage subsidy bonds, the City of
Huntington Beach has filed, pursuant to the Costa-Marks Noosing Band Allocation Act
of 1981, as amended (the "Costa-Marks Act"), ,a notice of sale of the principal
amount of the proposed Bonds with the State Mortgage Bond Allocation Committee;
WHEREAS, in addition,` the City has caused evidence of the deposit .of an
amount of money or a letter of credit securing such amount, 'which amount is subject '
:to the hereinafter described forfkiture upon the failure to sell any or only a
portion of the Bonds; and
r
y'.
WHERE4S, the Developer desires to provide a portion of +,he,deposit required
to be made in order for the City to obtain an allocation from the Mortgage 'Bond
Allocation Committee, such deposit to be subject to the terms, and conditions
hereinaft6r• 'Oescribed and as required by the Mortgage Bond Allocation Committee:;
NOW, THEREFORE, in consideration of the mutual promises herein set forth,
?nd for other good and valuable consideration it is hereby agreed as follows.
1: The Developer hereby reserves that ort' of the proceeds of the Bonds
SLfficieat to provide funds to purchase $ L : principal amount of Home
Mortgages to be made with 'respect to Homes to be constructed and sold by the
Developer and withi respect to existing;Homes to be marketed by the Dpveloper and
pro rats to fund any required` reserve funds and to pay Bona issuance costs (the
like servatian"). Prior to the offering of the Bonds by the underwriters_to its
syndicate or selling group, the Developer shall, with respect to the Reservation, '
. enter into a Comm.itment;Contract (and Reservation of Funds), substantially in the
form hereinafter referred to.
2. T in , Developer has, together with this Program Deposit Agreement,`
de.livered cash in an amount which is not less than one-half of one percent (1%2 of
1%) of.the.Developer's Reservation or an irrevocable letter ofcredit (the "Letter '.
:of. Credit"), substantially in the form attached hereto as 'Exhibit A and hereby'
made a part hereof, securing payment to .the Agency of an ar!ount: which is not less
than one-half or one percent of 1%) of the Developer's Reservation.
3. the total amount paid by the Developer -in cash:or, if applicable, the
_ amount secured by' the Letter of Credit, is the Deve,loper's program deposit''(the
"Deposit") and, _if a grant of an allocation shall be received by the' City, the
Deposit shall be forfeited by the_ Developer ' (in the amount and in the manner
requi red by the Costa-Marks Act) and shall be used by the City to assist housing for
persons of low and moderate income within the City in the event that:
(a) The Bonds are not sold within the time period specified in the c'
Costa-Marks Act based on the grant of the allocation for the Bor'ds by the Mortgage
Bond Allocation Committee; or
(b;l The Developer shall fail to execute a Commitment Contract (and
Reservation. of Funds)., substantially in the for:.i required ;by the underwriters of
the Bonds, prior to offering the Bonds by the underwriters to members of its r
syndicate or selling group, or the Developer shall fail to c_ perform in accordance
with the prov1si;ons of such Commitment' Contract (and Reservation of Funds),
including, without limitation, failure by the Developer to pay required program '
participation fees or to post 'required letters of credit.
¢. It islunderstood that the City will first apply that portion of the
forfeited Deposit to the payment of costs incurred. -in connection with the proposed y
issuance. of the Sands to the extent per, under:0e provisions of the Costa-
Marks Act, It is further understood that upon issuance of the Bonds, the Program
Deposit will be credited in full' toward payment of the Developer's program
participation free subject to the requirements of the Commitment Contract (and
Reservation of Funds),
fi
i
S
Y
5. It is further understood that the City will use its best efforts to
cause the Bonds to besold within the period specified in the Costa-Marks Act based
on the grant of the allocation by the Mcrtgage Bond Allocation Committee subject,
in all respects, to completion of proceedings for the issuance of the Bonds to the
satisfaction_of the City as the City shall, in its sole discretion, determine. The
City shall be under no obligation -to request any extension of the allocation by the. i
Mortgage Bond Allocation Committee or to request Waiver or reduction by the:
Mortgage Bond Allocation Committee it any Deposit forfeiture. The 'execution of-
this Agreement by the City shall , under no circumstances, be deemed to constitute
an approval of or obligation to approve any other matter relating to the Developer
which may come before the Board of Supervisors or be subject to the approval of the
City.
6. The cash portion of the Deposit shall be deposited by the City in an
interest bearing trust account and the interest thereon shall, from time to time as
such interest shall become available, be paid by the truF,tee of such account to the
Developer.
7. In the event that the Mortgage Bond Allocation Committee shall grant an
allocation to the.City which is less than the amount of the allocation requested by
the City in its notice to the Mortgage Bone: Allocation Committee, then the
reservation' of the developer, together with the reservations of all other.
{ .developers entering in'.o Program Deposit Acreements, shall be reduced pro rats
based' on the amount of the allocation ultimately granted, and,: to the extent
applicable, any entitlement allocation or supplemental allocation so reduced by the
Mortgage Bond Allocation_Committee shall also be reduced pro rata among developers
i in the same manner. A portion of the Prograr:i Deposit applicable to the reducti on in a
the Developer's Reservation shall be credited toward payment of the Developer's
Program Participation Fee, subject to the requirements of the Commitment Contract z
(and Reservation of Funds).
8. In the event that the Mortgage Bond Allocation Committee shall not have .
granted an allocation to the City for such Bonds by December 1, 1984, the Deposit
r shall be returned .o the Developer, less an amount equal to the Developer's pro A
rata share of expenses;theretofore incurred by t1te City. The Developer's share of
expenses shall be prorated based on the ratio of the Developer's reservation to: all ;
reservations of the proceeds of the Bonds in the Program.
REST OF PAGE NOT USED
i .fig
3
v`y
x , CITY OF ZIUNTINGTO BEACH HOME MORTGAGE REVEI3 BONDS
PROGRAM I)EPOSZT AGREEMENT ,
IN WITNESS WHEREOF, the City`and the Developer have caused this agreement to
be executed by their duly au�horized officers as of the date first above written.
DEVELOPER
By
t
:. 1.
"iJ
CITY11 OF HUNTINGtOF ;BEACH HOME MORTGAGE REVENUE BVNDS
PR.OGR1?1+! DEPOSIT AG,RE;EMENT
ATTEST:
By
City C1 erk _
APPROVED AS T FORM: INITIATED AND APPROVED AS TO
CONTENT: r
z
r
By By
City Attorne ci d ects Coordinator b
?r
APPROVED:
By - `
City Administra
r
T
tt.
X�
5
. A392H ,HW:ACH:ea 01/10/83
0
CITY OF HUNTINGTON BEACH
AOME MORTGAGE REVENUE BONDS:
PROGRAM DEPOSIT AGREEMENT
This Program Deposit Agreement (the "Agreement") is entered into this
, lSth� day of FPhrury , 1984, by and between the City of Huntington Beach (the
`City") andWestfiel d Huntington Cc(.the "Developer"): '
WITNESSETH: x .
a�
4
WHEREAS, Chapters 1-5 of Part 5 of,Division 31 of the Health and Safety Code
of the State of California (herein called the "Act") authorizes cities and counties ,t
to issue revenue bonds for the purpose of financing home mortgages authorized by
the Act, and the Act provides a complete, additional and alternative method for
doing the things authorized thereby;
WHEREAS, pursuant to S,ne Act, the City is authorized to carry out the public
purposes described therein by issuing its revenue bonds to acquire home mortgages
and by pledging such home mortgages as security for payment of the principal of and
interest on such revenue bonds, and by entering into any agreements in connection
therewith;
WHEREAS, the City has heretofore undertaken and proposes to continue its
home Mortgage Financing Program (the "Program") to purchase loans (the "Home
Mortgages") made to finance new and existing single-family owner-occupied
residential units (the "Homes") within the City, and to issue Home Mortgage Revenue
Bonds (the "Bonds") to finance the purchase of additional Home Mortgages;
WHEREAS, the Developer is in the process of subdividing land within the City
and intends to construct and market new single-family residential units thereon and
desires to reserve a portion of the proceeds of the Bonds to provide funds to
purchase Home Mortgages made with respect thereto;
WHEREAS, in order to obtain an allocation to issue the Bonds within the .
federally imposed limit upon tha issuance of mortgage subsidy bonds, the City of
Huntington Beach has filed, pursuant to the Costa-Marks Housing Band Allocation Act
of 1981, as amended (the "Costa-Marks Act"), a notice of sale of the principal
amount of the proposed Bonds with the State Mortgage Bond Allocation Committee;
WHEREAS, in additiosi, the City has caused evidence of the deposit of an
amount of,money or a letter of credit securing such amount, which amount is subject
to the hereinafter described forfeiture upon the failure to sell any or only a
portion of the Bonds; and
h
HEREAS, the Dev,2v, ~ desires to provide a portion of the deposit required
to be -,ade in order- for ':ity to obtain an allocation from the Mortgage fond
Allocation Committee, _. ;o deFosit to be subject to the terms and conditions ;t
hereinafter described and as req-t,ired by the Mortgage Bond Allocation Committee;
NOW, THEREFORE, in consideration of the mutual promises herein set forth,; �!
and far other good and valuable consideration is hereby agreed as follows:
1, The Developer hereby reserves that portion of the proceeds of the Bonds
sufficient to provide funds to purchase $4,400,000 principal amount of Home_
Mortgages to be made with respect to Homes to be constructed and sold by the
Developer and with respect to existing Horres to be marketed by the Developer and
pro rata to fund any required reserve funds and to pay Bond issuance costs (the
"Reservation"). prior to the offering of the Bonds by the underwriters to its
syndicate or selling group, the Developer shall , with respect to the Reservation,
enter into a Commitment Contract (and Reservation of Funds), substantially in the
form hereinafter referred to.
2. The Developer has, together with this Program Deposit Agreement, ,
delivered cash in an amount which is not less than one-half of one percent (112 of
1%) of the Developer's Reservation or an irrevocable :wetter of credit (the "Letter
of Credit"), .substantially in the form attached hereto as Exhibit _A, and hereby
made a part hereof, securing payment to the Agency of an amount which is not less
than one-half of one percent (112 of 1%) of the Developer's Reservation.
3. The total amount paid by the Developer in cash or, if applicable, the
amount secured by the Letter of Credit, is the Developer's program deposit (the
"Deposit") and, if a grant of an allocation shall be received by the City, the
Deposit shall be forfeited by the Developer (in the amount and in the manner
required by the Costa-Marks Act) and shall be used by the City to assist housing for
persons of low and moderate income within the City in the event that:
(a) The Bonds are not sold within the time period specified in the
Costa:-Marks Act based on the grant of the allocation for the Bonds by the Mortgage
Bond Allocation Committee; or
(b) The Developer shall fail to execute a Commitment Contract (and
Reservation of Funds), substantially in the form required by the underNyriters of
the ' Bonds, prior to offering the Bonds by the underwriters to members cf Its
syndicate or selling group, or the Developer shall fail to perform in accordance
With the provisions of such Commitment Contract (and Reservation of Funds),
including, without limitation, failure by the Developer to pay required program
participation fees or to post required letters of credit.
4. It is understood that the City will first apply that portion of the
forfeited Deposit to the payment of costs incurred in connection with the propo5ad
issuance of the Bonds to the extent permitted under the provisions of the Costa- '
Marks Act. It is further understood that upon issuance of the Bonds, the Program
Deposit will be credited in full toward payment of the Developer's program
participation fee subject to the requirements of the Commitment Contract (and
Reservation of Funds).
2 y,
5. It is further understood_that the City will use its best efforts to
cause the Bonds to be sold within the period specified in the Costa-Marks Act based ti
on the grant of the allocation by ;:he Mortgage Bond Allocation Committee subject,
in all respegts, to completion of ;proceedings for the issuance of the Bonds to the
satisfaction of the City as the City shall, in its sole discretion, determine. 'The-
City shall be under no obligation to request any extension of the allocation by the:
'Mortgage Bond Allocation Committee or to request waiver or reduction by the-
Mortgage Bond Allocation; Committee in any Deposit forfeiture. Tfie execution of-
this Agreement b; the City shall , under no circumstances, be deemed to constitute
i
aq approval of or obligation to approve any other matter relating to the Developer
which may come before the Board of Supervisors or be subject to the apprL�vai of the
City. t
6. The cash portion of '',he Deposit shall be deposited by the City in an
interest bearing trust account and the interest thereon shall, from time to time as
such interest shall 'become available, be paid by the trustee of such account to the
Developer.
7`. In the event that the Mortgage Bond Allocation Committee shall grant an
allocation to the City which is less than the amount of the allocation requested by
the City in its notice to the Mortgage Bond Allocation Committee, then the
reservation of the developer, together with the reservations of all other
developers entering into Program 'Deposit Agreements, shall be reduced pro rata *'
based on the amount of the allocation ultimately granted, and, to the extent
applicable, any entitlement allocation or supplemental allocation so reduced by the ;
Mortgage Bond Allocation Committee shall also be reduced pro rata among developers ; ,
in the same manner, A portion of the Program Deposit applicable to the reduction in
the Developer's Reservation shall be credited toward payment of the Developer's
Program Participation Fee, subject to the requirements of the Commitment Contract
(and Reservation of Funds).
8. In the event that the Mortgage Bond Allocation Committee shall not hive
granted an allocation to the City for such Bonds by December 1, 1984, the Deposit
shall be returned to the Developer, less an amount equal to the Developer's pro
rata share of expenses theretofore incurred by the City. The Developer's share of
expenses shall be prorated based on the ratio of the Developer's Reservation to all
reservations of the proceeds of the Bonds in the Program.
REST OF PAGE NOT USED
; r
3 .
n
5
CITY OF, ,HUNTINGTON CH'HOME MORTGAGE REVENUE NDS
PROGRAM DEPOSIT AG TENT
IN WITNESS WHEREOF,, the City aitd the Developer' have caused'this agre-ement t
be ekecuted.by their doily autL rued officers as of the date first above written.
r
DEVELOPER
WESTFIELD HUNTINGTON COMPANY
A Limited Partnership
BY: Westfi el d'Devel opment Company, Inca
General Partner
BY
MICHAEL E. HOWELL, Vice President' ;.
BY: jl
D of y K� Anderson, Assistant Sec'y `
r3 .
'rf
4
rf•
CITY OF`HUNTINGTON BEACH HOME MORTGAGE REVENUE BONDS
PROGRAM DEPOSIT AGREEMENT
ATTEST: 5
By
City Clerk
APPROVED'AS TO FORM: INITIATED AND APPROVED AS TO
CONTENT:
By By
Cit t rney cial ,7ects Coordinator
10 ,
APPROVED:
By
t' Administrator
R
i`i92H HHW:ACH:ea, 01/10/83
L
Wes° b"I
CITY OF HUNTINGTON BEACH
HOME MORTGAGE REUFNUE`BONDS
11i PROGRAM DEPOSIT AGREEMENT
I e "Agreement")g -
� This Program Deposit Agreement (the is entered into this
LS day of ytaw 1984, by and between the City of Huntington Beach (the
City' andZ�FW,tOi�w+ t.jr �o . (the "Developer"):
' W' ITNESSETH:
I '
WHEREAS, Chapters 1-5 of Part 5 of Division 31 of the Health and Safety Code
of the Stage of California (herein called the "Act") authorizes cities and. counties
to issue revenue bonds for the purpose of financing home mortgages authorized by
the Act, and the Act provides a complete, additional and alternative method for
doing the things authorized thereby;
WHEREAS, pursuant to the Act, the City is authorized to carryout the public
purposes described therein by issuing its revenue bonds to acquire home mortgages
r and by pledging such home mortgages as security for payment of the principal of and
interest on such revenue bonds,- and by entering into any agreements in connection
therewith;
WHEREAS, the City has heretofore undertaken and proposes to continue it -
Home Mortgage financing Program (the "Program") to purchase loans (the "Home
Mortgages") made to finance new and existing single-family owner-occupied
residential units (the "Homes") within the City, and to issue Home Mortgage Revenue
Bonds (the "Bonds") to finance the purchase of additional Home Mortgages; `
WHEREAS, the Developer is in the process of subdividing land within the City
and intends to construct and market new single-family residential units thereon and r.
desires to reserve a portion of the proceeds of the Bonds to provide funds to
purchase Home Mortgages made with respect thereto;
WHEREAS, in order to obtain an allocation to issue the Bonds within the
federally imposed limit .upon the issuance of mortgage subsidy bonds, the City of
Huntington Beach has filed, pursuant to the Costa-Marks Housing Bond Allocation Act
of 1981; as amended (the "Costa-Marks Act"), a notice of sale of the principal
amount`of the,proposed Bonds with the State Mortgage Bond Allocation Committee;
WHEREAS, in addition, the City has caused evidence of the deposit of an
amount of money or a letter of credit securing such amount, which amount is subject
to the hereinafter described forfeiture upon the failure to sell any or only a
portion of the Bonds; and
t
WHEREAS, the Developer oaares to provide ,a portion .of the deposit required
tci be `made in order for- the City to obtain an allocation from the Mortgage Bond
Allocation Committee, uch deposit to be subject to the terms and conditions
here inafter°described and as required by the Mortgage Bond Allocation Committee;
NOW, THEREFORE, in consideration of the mutual promises herein set forth,:
and for other good and valuable consideration it is hereby agreed as follows:
1. The Developer hereby reserves that portion of the proceeds of the Bonds
sufficient to provide funds to purchase $ 3 goo 000 principal amount of Home
_ Mortgages to be made with respect to domes to b constructed and sold by the
Developer and with respect to existing Homes to be marketed by the Developer and T
pro rata to fund any required reserve funds and to pay Bond issuance costs (the
"Reservation"). Prior to the offering of the Bonds by the underwriters to its,
syndicate jr selling group, the Developer shall , with respect to the Reservation,
enter intoa Commitment Contract (`and Reservation of Funds), substantially in the
form ,: reinafter referred tc..
2. The Developer has, together with`tkiis Program Deposit Agreement,
delivered cash in an amount which is not less than one-half of one percent (1/2 of
1%) of the Developer's Reservation or an irrevocable letter of credit (the "Letter
of Credit"),` substantia'lly in the form attached hereto as Exhibit A, and hereby
made a part hereof, securing payment to the Agency of an amount which is not_less
than one-half of one percent (1/2 of l%) of the Developer's Reservation.
3. The total a.�ount paid by the Developer in cash or, if applicahle, the
s ' amount secured by the Letter of Credit, is the Developer's program deposit (the
"Deposit") and, if a grant of an allocation shall be received by the City, the
Deposit shall; be forfeited by the Developer (in the amount and in the manner
required by the Costa-Marks Act) and shall be used by the City to assist housing for
persons' of low and moderate income within the City in the event that: s
(a) The Bonds are not sold within the time period specified in the
Costa-Marks Act based on the grant of the allocation for the Bonds by the Mortgage
Bond Allocation Committee; or
r
(b) The Developer shall fail to execute,a Commitment Contract (arid
Reservation of Funds), substantially in the form required by the underwriters of
the Bonds, prior to offering the Bonds by the underwriters to members of its :
syndicate or selling group, or the Developer shall fail to _perform in accordance
with the provisions of such Commitment Contract (and Reservation of Funds),
including, without limitation, failure by the Developer to Nay required program
participation fees or to post required letters of credit. r
4. It is u, 'erstood that the City will first apply 'that portion of the
forfeited Deposit to the payment of costs incurred in connection with the proposed
issuance of the Bonds to the extent permitted under the provisions of the Costa
-
d Marks Act. It is further understood that upon issuance of the Bonds, the Program
Deposit will be credited in full toward payment of the Developer's program
participation fee: subject to the requirements of the Commitment Contract (and
Re,servati on of Funds).
�F
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28
5.. It is further understood that the City gill use its best efforts to
cause the Bonds to be sold within the period specified in the Costa-Marker Act based
on the grant of the allocation by the Mortgage Bond Allocation Commiti + subject,
in all:respe�ts, to completion of proceedings for the issuance of the Bonds to the
satisfaction' of the City as the City shall, in its sole discretion, determine. The'
City shall be under no abH gation to request any extension of the allocation by the
Mortgage Bond Allocation Committee or to request ,waiver or reduction by the:
Mortgage Bond Allocation Committee in any Deposit forfeiture. The execution of
this Agreement by the City shall , under no circumstances,, be deemed to constitute
an approval of or obligation to approve any other matter relating to the Developer
which may come before the Board of Suparvi'sor•s.or be subjectto the approval of the '
City.
6. The cash portion of the Deposit shall be deposited by the City In an
interest bearing trust account and the interest thereon shall , from time 4o time as
such interest shall become available, be paid by the trustee of such account to the
Developer:
7. .In the event that the Mortgage Bond Allocation Committee shall grant an
allocation to the City which is less than the amount of the allocation requested by
the City in its notice to the Mortgage Bond Allocation Committee, then the
reservation of the developer, together with the reservations of all 'other
developers entering into Program Deposit Agreements, shall be reduced pro rata
based on the amount of the allocation ultimately granted, and, to the extent
` applicable, any entitlement allocation or supplemental allocation so reduced by the
Mortgage Bond Allocation Committee shall also be reduced pro rata among developers
in the same manner.' A portion of the Program Deposit applicable to the reduction in '
the Developer's Reservation shall be credited toward payment of the Developer's
Program Participation Fee; subject to the requirements of the Commitment Contract;
(and Reservation of Funds).
8. In the event that the Mortgage Bond Allocation Committee shall not have
granted 'an allocation to the City for such Bonds by December 1, 1984, the Deposit
shall be returned to the Developer, less an amount equal to the Developer's pro
rata share of expenses theretofore incurred by the City. The Developer's share of
z expenses shall be prorated based on the ratio of the Developer's Reservation to all
reservations of the proceeds of the Bonds in the Pr>tgpam.
REST OF PAGE NOT USED
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Ask
'CITY OF HUNTINGTON wt ACH HOME MORTGAGE REVENUE ENDS
} PROGRAM DEPOSIT AGREEMENT
IN WITNESS WHEREOF, the City and the Developer have caused this agreement to
be executed,by their duly authorizes officers as of the date first above written.
OBELOPE2 THE 4fi1_LIAM L ON CO.
ByBy Ekvx-A-J'
{Inserttitle]
4 .
CITY OF HUNTINGTON'BEACH HOME MORTGAGE REVENUE BONDS
PROGRAM DEPOSIT AGREEMENT
ATTEST: .'
B
City-C1 erk riay -- . _r
APPROVED AS TO FORA: INITIATED AND APPROVED AS TO
CONTENT:
By
ity;Atter y c' sects Coordinator
z,
a
APPROVED: t
t
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By �'
y P.dmin�strator
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5