HomeMy WebLinkAbout1981-138 CRA
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COMMUNITY REDEVELOPMENT AGENCY OF THE
CITY OF SANTA ANA
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RESOLUTION NO. 81-138
A RESOLUTION AUTHORIZING THE ISSUANCE OF $1,000,000
PRINCIPAL AMOUNT OF COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF SANTA ANA
SECURED PROMISSORY NOTE
(McCulloch's Buildings)
Adopted December IS, 1981
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12/14/81
12/21/81
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ARTICLE I
Section 1.01
Section 1.02
Section 1.03
Section 1.04
ARTICLE I I
Section 2.01
Section 2.02
Section 2.03
Section 2.04
Section 2.05
Section 2.06
Section 2.07
TABLE OF CONTENTS
Pöge
Authorization of Notes; Definitions. .
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Definitions..............
(ba)) AACgten'cy".'.""""""""
( . . . . . . . . . . . .
(c) Agreements. ...........
(d) Bank.. . . . . . . . . . . . . . . . . .
(e) Certificate of the Agency
Written Request of the Agency. . . . . .
(f) Deeds of Trust. . . . . . . . . .
(g) Federal Securities. . . . . . . .
(h) Financing..... ........
(i) Holder,Noteholder............
(j)Loans........ .......
(k) Note. . . . . . . . . . . . . . . . . . .
(1) Official Determination. . . . . . . . . .
(m) Participating Parties. . . . . . .
(n) Permitted Investments. . . . . . . . . . .
(0) ProjectCosts...............
(p) Projects... . . . . . . . . . .
(q) Promissory Notes. . . . . . . . . . . . .
(r) Purchase Agreement. . . . . . . .
(s) Revenues.................
(t) Sites. . . . . . . . . . . . . . . . . . .
(u) Supplemental Resolution. . . . . .
(v) TaxableDate...............
Equal Security. . . . . . . . . . . . . . . . .
Findings....................
No Limitation. . . . . . . . . . . . .
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The Note. . . .
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Authorization. ............
Terms of Note. ............
Prepayment of Note...............
Execution of Note. . . . . . .
Transfer of Note................
Note Mutilated, Lost, Destroyed or Stolen. . .
NoteRegister.................
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ARTICLE III
Section 3.01
Section 3.02
ARTICLE IV
Section 4.01
Section 4.02
Section 4.03
Section 4.04
Section 4.05
ARTICLE V
Section 5.01
Section 5.02
Section 5.03
. Section 5.04
. Section 5.05
ARTICLE VI
Section 6.01
Section 6.02
Section 6.03
ARTICLE VII
Sect ion 7.01
Section 7.02
Section 7.03
Section 7.04
. Section 7.05
Section 7.06
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Use of Proceeds of Note. . . . . . . .
Application of Proceeds of Sale of Note. . . .
Historical Rehabilitation Fund. . . . .
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Revenues; Note Fund. . . . . . . . . . . . . .
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Pledge of Revenues. . . . . . . . . . . . . . .
NoteFund...............
Use and Withdrawal of Revenues. . . . . . . . .
Deposit and Investment of Moneys in Funds. . .
AssignmenttoBank...............
Covenants of the Agency. .
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Punctua 1 Payment. . . . . . .
Against Encumbrances. . .
Preservation of Revenues;
Amendment of Agreement, Promissory Note
and Deed of Trust...............
Compliance with Resolution. . . . . . .
Further Assurances. . . . . . . . . . . . . . .
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Amendment of Resolution. . . . . . . . . . . .
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Amendments Permitted. . . . . . . . . . . . . .
Effect of Supplemental Resolution. . . . . . .
Endorsement or Replacement of Note
AfterAmendments...............
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Events of Default and Remedies of Noteholder. .
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Events of Default and Acceleration
of Maturities.................
Application of Funds Upon Acceleration. . . . .
Institution of Legal Proceedings
byBankorTrustee...............
Effect of Delay or Omission to Pursue Remedy. .
Remedies Cumulative. . . . . . . . . .
Control of Proceedings. . . . . . . . . . . . .
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ARTICLE VI I I
Section 8.01
Section 8.02
Section 8.03
Section 8.04
Sect ion 8.05
Section 8.06
Section 8.07
Section 8.08
Exhibit A
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Miscellaneous. . . . . . . . . . . . . . . . .
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Benefits of Resolution Limited to Parties. . .
Successor is Deemed Included
in All References to Predecessor. . . . . . . .
Discharge of Resolution. . . . . . . .
Execution of Documents and
Proof of Ownership by Noteholders . . . . . . .
Waiver of Personal Liability..........
Notice and Demands on Agency. . . . . .
PartialInvalidity...............
Effective Date of Resolution. . . . . .
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Secured Promissory Note. . . . . . . . . . . .
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RESOLUTION NO. 81-138
A RESOLUTION OF THE
COMMUNITY REDEVELDPMENT AGENCY OF THE
CITY OF SANTA ANA AUTHORIZING THE ISSUANCE OF
$1,000,000 PRINCIPAL AMOUNT OF COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF SANTA ANA
SECURED PROMISSORY NOTE
(McCulloch's Buildings)
WHEREAS, the Colll11unity Redevelopment Agency of the City of Santa Ana
(the "Agency") is a redevelopment agency functioning pursuant to Part 1
(c.olll11encing with Section 33000) of Division 24 of the Health and Safety Code
of the State of California and as such constitutes a local agency within
Section 37602(g) of the Marks Historical Rehabilitation Act of 1976, as
amended (the "Act");
WHEREAS, pursuant to its Resolution No. 81-124, adopted Novermer 2,
1981, the Agency, with the consent of the City of Santa Ana (the "City")
ad.opted by reference the historical rehabilitation program established by the
City under the Act;
WHEREAS, pursuant to the Act, the Agency has determined to issue its
Secured Promissory Note to aid in the financing of the rehabilitation of
historical properties located within the historical rehabilitation area
designated by the City in accordance with the procedures described in the Act;
WHEREAS, the Agency has reviewed all proceedings heretofore taken and
has found, as a result of such review, and hereby finds and determines, that
all things, conditions and acts required by law t.o exist, happen or be
performed precedent to and in connection with the issuance of the Note d.o
exist, have happened and have been perf.ormed in due time, form and manner as
required by law, and the Agency is now duly e~owered, pursuant to each and
every requirement of law, to issue the Note in the manner and form provided in
this Resolution.
BE IT RESOLVED BY THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF
SANTA ANA AS FOLLOWS:
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ARTICLE I
AUTHORIZATION OF NOTES; DEFINITIONS
Section 1.01. Definitions. Unless the context otherwise requires, the
terms def1ned 1n subsect1ons (a) through (v), inclusive, of this Section 1.01
shall, for all purposes of this Resolution, of any Supplemental Resolution and
of any certificate, opini.on or other document herein mentioned, have the
meanings ascribed to such terms in subsections (a) through (v).
(a) Act. "Act" means the Marks Historical Rehabilitation Act of
1976, as amended:ï)eing Part 10 (conmencing with Section 37600) of Division 24
of the Health and Safety Code of the State of California.
"Agency" means the Conmunity Redevelopment Agency of
(b) Agency.
the City of Santa Ana.
(c) Agreements. "Agreements" means those certain three
agreements, entitled "Project Agreement", dated as of December 1, 1981,
between the Agency and the respective Participating Parties pertaining,
respectively, to Project 2A, and Project 2B.
(d) Bank. "Bank" means Wells Fargo Bank, National Association,
the original purchaser of the Note.
(f) Deeds of Trust. "Deeds of Trust" means the respective deeds
of trust, from the respective Participating Parties to the Bank, executed and
delivered pursuant to the respective Agreements.
(g) Federal Securities. "Federal Securities" means United States
Treasury notes, bonds, bi 11 s or certificates of indebtedness or those for
which the faith .and credit of the United States are pledged for the payment of
principal and interest; obligations issued by banks for cooperatives, federal
land banks, federal intermediate credit banks, federal home loan banks, the
Federal Home Loan Bank Board, the Tennessee Valley Authority, or obligations,
participations, or other instruments of or issued by, or fully guaranteed as
to principal and interest by, the Federal National Mortgage Association; or
participation certificates evidencing beneficial interests in obligations, or
in the right to receive interest and principal collections therefrom, which
obligati.ons have been subjected by one or IßC)re government agencies to a trust
or trusts f.or which any executive department, agency or instrumentality of the
United States (.or the head thereof) has been named to act as trustee, 'all as
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to and the extent that such securities are eligible for the legal investment
of Agency funds.
(h) Financing. "Financing" and its variants means the lending of
moneys or any other thing of value for the purpose of facilitating the
construction of the Projects on the Sites, including refinancing of
.outstanding indebtedness incurred for such purposes.
(i) Holder; Noteholder. "Holder" or "Noteholder" means any person
who shall be the registered owner of the Note.
(j) Loans. "Loans" means the respective loans made by the Agency
to the respective Participating Parties for the Financing of the
rehabil itat i on .of the Projects on the Sites pursuant to the Agreements and
evidenced by the Promiss.ory N.otes.
(k) Note. "Note" means the C.onmunity Redevelopment Agency of the
City of Santa Ana Secured Promissory Note (McCull.och's Buildings), authorized
by, and issued pursuant to, this Resolution.
(1) Official Determination. "Official Determination" means (and
for all purposes of this Res.olution shall be deemed to have occurred as of) a
change in the Internal Revenue Code of 1954, as amended, the issuance of a
statutory notice of deficiency, or ruling by the Internal Revenue Service or a
ruling by any court of competent jurisdiction, or any other occurrence, the
effect of which, in the opinion of nationally-recognized bond counsel
acceptable t.o Agency and Bank, is to make interest payable on this Note
includable in the gross income of the holder hereof (except to the extent that
such interest is so includable because the holder is a "substantial user" of
any of the Projects referenced below or a "related person" as such terms are
defined in Section 103 of the Internal Revenue Code of 1954, as amended). The
fees and expenses of any such bond counsel in connection with such opinion
shall be an obligation of Agency payable from the same s.ource and secured in
the same manner as are all other obligati.ons evidenced hereby.
t t P(m). ~a~¡iCi~a~in~ Pt~~ier k M"PCarltlicihPatidngJ PaRrtiMesC" lmleahns with
respec 0 roJec an roJec ac c u oc an oy . c u oc.
(n) Permitted Investments. "Permitted Investments" means Federal
Securities or certlflcates of deposit of commercial banks (including the Bank)
with a paid in capital and surplus in excess of $500,000,000.
(0)
"Project Costs" means, with respect to each
Project Costs.
Project,
(i) the amount required to pay the interim construction
loan obtained by the Participating Party for said Project provided that the
Participating Party certifies to the Agency that the proceeds of the interim
construction loan were used by the Participating Party for:
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(A) obligations of the Participating Party incurred for
labor and materials (including reimbursements payable to the Participating
Party and payments on contracts in the name of the Participating Party) in
connection with the rehabilitation of the Project;
(B) the cost of contract bonds and of insurance of all
kinds that may be required or necessary during the course of the
rehabilitation of the Project;
(C) all costs of architectural and engineering
services, including the costs of surveys, estimates, plans and specifications
and preliminary investigations therefor, and for supervising construction, as
well as for the performance of all other duties required by or consequent upon
the proper rehabilitation of the Project; or
(D) any other costs or expenses incurred on or after
the date upon which the Agency took official action with respect to the
Project, as determined by the Agency, which are properly chargeable t.o the
capital account for, and constitute capital expenditures f.or, the Project or
with a proper election by the Participating Party or but for such an election
would constitute capital expenditures for the Project.
(ii) all costs and expenses incurred by the Agency in
connection with the determination as to the feasibil ity or practicabil ity of
undertaking the Project, and in connection with the administrati.on and
supervision of the Project including architect, engineering, survey, and
appraisal fees and costs; and
(iii) all expenses incurred in c.onnection with the closing of
the Loans and the issuance of the Note, including without 1imitati.on loan
fees, legal and accounting expenses and fees, costs of title insurance, costs
of printing, and recording and filing fees;
(p) Projects. "Projects" means Project 2A and Project 2B.
"Project 2A" means the rehabilitation of the properties l.ocated at 108 West
Fourth Street, which properties are owned by Jack McCulloch and Joy R.
McCulloch. "Project 2B" means the rehabiliation of the properties located at
214/220 West Fourth Street, which properties are owned by Jack McCulloch and
Joy R. McCulloch.
(q) Promissory Notes. "Promissory Notes" means the notes executed
by the respective Participating Parties evidencing and securing the repayment
of the respective Loans pursuant to the respective Agreements.
(r) Purchase Agreement. "Purchase Agreement" means that certain
Purchase Agreement dated December 15, 1981, pursuant to the terms of which the
Bank agrees to purchase the Note fr.om the Agency and the Agency agrees to sell
the Note to the Bank.
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(s) Revenues. "Revenues" means all rents, receipts, payments and
other income and revenue received by the Agency or the Bank with respect to,
or otherwise derived from, the Financing of the Projects, including without
1 imitati on all Loan payments and prepayments thereof and other amount received
from the respective Participating Parties pursuant to the Agreements and the
Promissory Notes, all amounts and properties derived from the enforcement of
the Agency's rights and privileges under the Deeds of Trust, assignments of
lessor's interest in leases executed by Participating Parties and security
agreements executed by Participating Parties, any guarantees of Promissory
Notes, all proceeds derived from the insurance policies maintained pursuant to
the Agreements, all funds and accounts created pursuant to this Resolution,
and all investment earnings on said funds and accounts.
(t) Sites. "Sites" means premises upon which Project 2A is
located, as more particularly described in the Agreement pertaining t.o Project
2A; and the premises upon which Project 2B is located as more particularly
described in the Agreement pertaining, to Project 2B.
(u) Supplemental Resolution. "Supplemental Resolution" means any
resolution then in full force and effect which has been duly adopted by the
Agency at a meeting of the thereof duly c.onvened and held, at which a quorum
was present and acted there.on, amendatory of or supplemental to this
Resolution; but only if and to the extent that such Supplemental Resolution is
specifically authorized hereunder.
(v) Taxable Date. "Taxable Date" means the date as of which
interest payable on the Note is includable in the gross income of a Noteholder
by reason of an Official Determination.
Section 1.02. Equal Security. In c.onsideration of the acceptance of
the Note by the Bank and by all who shall hold the same from time to time,
this Res.olution shall be deemed to be and shall constitute a contract between
the Agency and the Holder fr.om time to time of the Note, and the covenants and
agreements herein set forth to be performed on behalf of the Agency shall be
for the benefit, security and protecti.on of all Holders of the Note without
preference, priority or distinction, for any cause whatsoever, except as
expressly provided therein .or herein.
Section 1.03. Findings. Pursuant to Health and Safety C.ode Section
37629, the Agency hereby finds that the Loans to be made from the proceeds of
the Notes are to be used for historical rehabilitation as defined in the Act,
and the financing of the rehabilitation of the Projects is economically
feasible.
Section 1.04. No Limitation. The provisions of this Resolution are not
intended to limit the provisions of the Purchase Agreement, .the Pledge
Agreement (as referenced in the Purchase Agreement and referred to herein as
the "Pledge Agreement"), the Agreements or the C.ollateral Assignment (as
referenced in the Agreements and referenced to herein as the "Col,lateral
Assignment"), each of which documents is this day being approved by the Agency.
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ARTICLE II
THE NOTE
Section 2.01. Authorization. A Note in the aggregate principal amount
of One Million Dollars ($1,000,000) is hereby authorized to be issued by the
Agency under and subject to the terms of this Resolution and the Act. This
Resolution constitutes a continuing agreement with the Holder of the N.ote to
secure the full and final payment of principal of and premium, if any, and the
interest, fees and other charges on the Note subject to the covenants,
agreements, pr.ovisions and c.onditions herein contained. The purpose for which
the Note shall be issued is to provide funds to make the Loans to the
Participating Parties for the purp.ose of Financing of the Pr.ojects pursuant t.o
the Agreements. The Note shall be designated the "Conrnunity Redevelopment
Agency of the Agency of Santa Ana Secured Promissory Note (McCulloch's
Buildings)."
Section 2.02. Terms of the Note. The Note shall be dated as of
December I, 1981, and shall be issued as a single fully registered N.ote,
without coupons, substantially in the form set forth on Exhibit A attached
hereto and by this reference incorporated herein. The Note shall be sold and
delivered to the Bank in accordance with ,the Purchase Agreement.
The Note shall mature and bec.ome payable on December I, 1991, and shall
bear interest on the unpaid principal balance hereof from the date he.reof
until due, at a rate ("Basic Rate") per annum one-half percent greater than
sixty-five hundredths (.65) times the Base Rate (.5%) (as hereinafter defined
and determi ned). "Base Rent" shall mean that rate of interest charged by Bank
on conrnercial real estate loans, interest on which is subject to federal
income taxation, on properties similar in use t.o those described in the
Project Agreements referenced below. The Base Rate for the period fr.om
December I, 1981 to December I, 1986 shall be determined as of December I,
1981 and the Base Rate from and after December I, 1986 shall be determined as
of December I, 1986. Interest .only shall be due and payable on the first day
of each calendar month conrnencing January I, 1982 and continuing through
December I, 1982. Thereafter, installments of principal and interest shall be
due and payable on the first day of each calendar month conrnencing January I,
1983 and continuing through December I, 1991, whereupon the entire principal
balance of this Note, together with interest thereon, shall be due and
payable. Installment of principal and interest due from January I, 1983 to
December I, 1991 shall be in equal amounts sufficient, after the payment of
accrued interest to amortize the original principal amount of this Note in 360
equal monthly installments; provided that the amount of such installments
shall be subject to adjustment, as necessary, on December I, 1986 to reflect
any change in the Base Rate. Bank shall determine the initial amount of such
installments and give Agency notice there.of between December I, 1982 and
December 20, 1982. Bank shall determi ne the amount of such installments for
the period conrnencing Deceni>er I, 1986 and shall give Agency notice t.hereof
between December I, 1986 and Deceni>er 20, 1986.
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Notwithstanding the foregoing, if interest on this Note becomes subject
to federal income taxati.on pursuant to an Official determinati.on (as
hereinafter defined): (a) the rate of interest otherwise in effect on this
Note shall be increased to a rate ("Adjusted Basic Rate") per annum equal t.o
one-half percent (.5%) above the Base Rate, determined as above provided; and
(b) Agency shall forthwith pay to Bank, or its re9istered assigns, for the
period from the Taxable Date (as hereinafter defined) to the effective date of
the adjustment reuqired by the foregoing sentence an amount equal to the
product of (i) the outstanding principal amount of this Note from time to time
during such period and (ii) the difference between the Adjusted Basic Rate and
the Basic Rate during such period. If more than one person has been the
Holder of this Note during such period, such amounts shall be allocated among
such Holders in accordance with the number of days furing which this N.ote was
held by each such Holder during such period. Any H.older of this Note may
protest or contest any Official Determination. If an Official Determination
is protested or contested, interest shall continue to be payable at the
Adjusted Basic Rate while such protest or contest is pending. If such protest
or contest is successful, the Holder hereof shall apply all interest collected
at a rate in excess of the Basic Rate in reduction of the principal hereof or
any other amounts owing hereunder, or if such principal and all such other
amounts have been paid in full, such excess shall be refunded to Agency.
Without in any way limiting the survival .of any other provision of this Note,
Agency hereby express ly agrees that the obligations imposed upon it by th i s
paragraph shall survive payment and discharge .of this Note for a period of
five years.
Any principal or interest .on the Note not paid when due shall thereafter
bear interest at a rate equal to five percent (5%) per annum in excess of the
rate otherwise in effect on the Note. In addition to such interest, the
Agency sha 11 pay upon demand a reasonb le rate, fee or co llecti on charge not
exceeding four percent (4%) of such principal amount.
All principal, interest and other amounts payable on the Note shall be
payable in lawful money of the United States of America at the principal
office of the Bank in Santa Ana, California, or at such address as any
subsequent Holder of the Note shall file with the Agency.
So long as the Note is not in default, each installment of principal and
interest when paid shall be applied by the Noteholder first to the payment of
interest accrued on the N.otes, and the balance thereof to the payment of
principal. When any default hereunder has occurred and is continuing, the
Noteholder may apply payments, in its election, to principal or interest.
Section 2.03. Prepa*ment of Note. This Note may be prepaid in full or
in part, wlthout prepaymen penalty or premium, on any installment due date
upon thirty (30) days' prior written notice to the Holder of this Note. The
Note shall be prepaid concurrently with and to the extent of any prepayment on
any Participant Note (as defined in the Project Agreement referenced below).
Each prepayment shall be applied to principal but Agency shall continue.to pay
installments in the amounts and at the times required in this Note until
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principal and interest on this Note are paid in full. This Note shall also be
prepaid if and to the extent that any event shall occur which makes it
reasonably certain that any portion of the principal amount of the
indebtedness ev idenced hereby wi 11 not be used to make one or more of the
Loans contemplated by the Agreements. Without limitation of the foregoing,
such result shall be reasonably certain if (a) Bank declines to approve any
Loan or approves any L.oan in an amount less than the maximum permitted by the
corresponding Agreement or (b) any Agreement .or Conmitment, as defined in an
Agreement, terminates or expires prior to the funding of the Loan contemplated
thereby.
Section 2.04. Execution of Note. The Note shall be executed on behalf
of the Agency by the signature of the Chairman and attested on behalf of the
Agency by the signature of the Executive Director or Vice Chairman, and the
seal of the Agency shall be impressed there.on. If any officer whose signature
appears on the Note ceases to be such offi cer before the delivery of the Note
to the Bank, such signature on the N.ote shall nevertheless be as effective as
if the officer had remained in office until the delivery of the N.ote to the
Bank.
Secti on 2.05. Transfer of Note. The Note may be transferred by the
Ho 1 der thereo f by endors i ng thereon (or (J1 a paper attached thereto) the
amount of principal paid thereon as of the date .of transfer. Notificati.on of
such transfer shall be promptly given to the Agency for entry upon the books
required to be kept by the Agency pursuant to the provisions of Section 2.07,
of the name and address of the transferee.
Section 2.06. Note Mutilated, L.ost, Destroyed or Stolen. If the Note
sha 11 become mutilated, the Agency, at the expense of the Holder of the Note,
shall execute and deliver, a new Note of like tenor in exchange and
substitution for the Note so mutilated, but only upon surrender to the Agency
of the Note so mutilated. Every mutilated Note so surrendered to the Agency
shall be cancelled by it. If the Note shall be lost, destroyed or stolen,
evidence of such loss, destruction or theft may be submitted to the Agency,
and, if such evidence is satisfactory to the Agency and indemnity satisfactory
to the Agency is given, the Agency, at the expense of the owner of the Note,
shall execute and deliver, a new Note of like tenor in lieu of and in
substitution for the Note so lost, destroyed or stolen. The Agency may
require payment of a sum not exceeding the actual cost of preparing each new
Note issued under this Section and of the expenses which may be incurred by
the Agency. Any Note issued under the provisions of this Section in lieu of
any Note alleged to be lost, destroyed or sto 1 en sha 11 be ent i t 1 ed to the
benefits of this Resolution.
Section 2.07. Note Register. The Agency will keep at its offices,
sufficient bo.oks for the registration and transfer of the Note, which shall at
all times be open to inspection by the Bank; and, upon presentation for such
purpose the Agency shall, under such reasonable regulations as it may
prescribe, enter on said books, the names and addresses of the Holders .of the
Note f.ol10wing transfer pursuant t.o Section 2.05.
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ARTICLE III
USE OF PROCEEOS OF NOTE
Section 3.01. Application of Proceeds of Sale of Note. The proceeds
received by the Agency from the sale of the Note shall be deposited as follows:
(a) The Agency shall dep.osit into the Note Fund established
pursuant to Section 4.02 any accrued interest or premium received on the sale
of the Note.
(b) The Agency shall deposit into the Historical Rehabilitation
Fund established pursuant to Section 3.02 the remainder of said proceeds.
Section 3.02. Historical Rehabilitation Fund. There is hereby created a
fund to be designated the "Community Redevelopment Agency of the Agency of
Santa Ana Secured Promissory Note (McCullogh's Buildings) Hist.orical
Rehabilitation Fund" (herein referred to as the "Historical Rehabilitation
Fund"), which shall be held by the Agency in trust and applied to the payment
of the Pr.oject Costs. Within the Historical Rehabilitation Fund, there is
hereby created two accounts to be designated respectively, the "Project 2A
Account" and the "Project 2B Account". Following delivery .of the Note and
deposit of the proceeds thereof into the Historical Rehabilitation Fund, the
Agency shall transfer $300,000 thereof t.o the Project 2A Account to be applied
to the payment .of Project Costs in accordance with the terms of the Agreement
relating to Project 2A; and shall transfer $700,000 thereof to the Project 2B
Account to be app 1 i ed t.o the payment of Pr.oject Costs in accordance with the
terms of the Agreement relating to Project 2B. With the consent of the Bank,
the Agency may transfer monies from .one of said Accounts to another of said
Accounts, but in no event shall such transfer be made unless and until the
applicable areements have been amended and the principal amount of the Loans
to the applicable Participating Parties have been appropriately m.odified.
After payment of all Project Costs payable fr.om the Historical
Rehabilitation Fund or provision satisfactory to the Agency having been made
for payment of Project C.osts not yet due or the Agency becomes reasonably
certain that all or any portion of amounts in the Historical Rehabilitation
Fund wi 11 not be used to make all or any port ion of the Loans, as further
referenced in Section 2.03 hereof, the Agency shall transfer any remaining
balance in the Historical Rehabilitation Fund to the Note Fund established
pursuant to Section 4.02 to be used for prepayment of the principal of the
Note in an amount equal to the amount of such transfer on the first day of the
month next f.ollowing the date of transfer.
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ARTICLE IV
REVENUES; NOTE FUND
Section 4.01. Pledr of Revenues. The payment of the Note shall be
secured by a first pledge which pledge shall be effected in the manner and to
the extent hereinafter provided) of all of the Revenues and a first pledge of
a 11 of the moneys in the Note Fund. The Revenues are hereby allocated in
their entirety to the payment of the principal .of and interest on the Note
and, until the payment in full there.of, the Revenues shall be applied solely
to the payment of such principal and interest. The pledge and allocation of
Revenues is for the exclusive benefit of the Noteholders and shall be
irrevocable until the Note has been paid and provision made therefor. The
Agency will not issue any obligation or security superior to or on a parity
with the Note, howsoever denominated, payable in whole or in part from the
Revenues until the Note has been paid and retired or provision made therefor.
The Note shall be a special obligation of the Agency and shall be
payable solely from the Revenues. The Note shall n.ot constitute a debt of the
Agency, of the City of Santa Ana, .of the State .of California or of any of its
subdivisions, and neither said State nor any of its p.olitical subdivisions
shall be liable thereon, nor in any event shall the Note be payable out of any
funds or properties of the Agency other than the Revenues as pr.ovided herein.
The faith and credit .of the Agency is not pledged to the payment of the
principal of or interest on the Note.
Section 4.02. N.ote Fund. There is hereby created a special fund to be
designated the "C.orrrnunity Redevelopment Agency of the City of Santa Ana
Secondary Promi ssory Note (McCulloch I s Buildi ngs) Note Fund" (herein referred
to as the "Note Fund"), whi ch the Agency hereby c.ovenants and agrees to cause
to be maintained and which shall be held in trust by the Agency for the
benefit .of the Noteholders. Upon the receipt thereof, the Agency shall
deposit all Revenues in the Note Fund.
Section 4.03. Use and Withdrawal of Revenues. All Revenues in the Note
Fund shall be used and withdrawn fr.om the Note Fund solely f.or the purpose of
payment of principal and interest on the Note when and as due except that
prepayments of Loans made by the Participating Parties, insurance and
condemnation proceeds not used for replacement or repair of the applicable
Project and transfers from the Historical Rehabilitation Fund pursuant to
Section 3.02 shall be used for prepayment of the Note.
When the Note is no longer outstanding, all fees, charges and expenses
of the Bank have been paid or provided for, all expenses of the Agency
relating to the Projects have been paid or provided for, and this Resoluti.on
has been discharged and satisfied, the Agency shall deposit any amounts
remaining in the Note Fund in its general funds, unless such amounts properly
belong to the Participating Parties.
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Section 4.04. Deposit and Investment of Moneys in Funds. All moneys
held in any .of the funds .or accounts established pursuant to this Resolution
shall be deposited in demand or time deposits (which may be represented by
certificates of deposit) in any bank or trust company authorized to accept
deposits of trust funds (including the banking department of the Bank) and. as
and to the extent required by law. shall be secured at all times as trust
funds, or in lieu there.of may be invested by the Agency in Permitted
Investments maturing prior t.o the date on which such moneys are estimated to
be required to be paid out hereunder. All interest or gain received on or
pri or to DeceiTDer I, 1982, shall be deposi ted in the Note Fund and shall be
used for the payment of interest due on the Note on and prior to DeceiTDer 1.
1982. All interest or gain received after December 1. 1982, shall be
deposited in the Note Fund and used f.or the payment of principal and interest
on the Note when due in accordance with the terms .of Section 2.02 here.of or by
prepayment in accordance with Section 2.03 hereof. Amounts in excess of the
amounts required for use in accordance with Section 2.02 and 2.03 may be
withdrawn by the Agency and dep.osited in its general funds so long as there is
not an event of default hereunder.
Section 4.05. Assignment to Noteholder. The Agency hereby transfers.
assigns and sets over to the Noteholder without recourse all of the Revenues
and any and all rights, privileges and obligations it has under the
Agreements, the Deeds .of Trust and the Promi ssory Notes i ncludi ng, wi thout
limitation, the right to collect and receive directly all of the Revenues. and
any Revenues collected or received by the Agency shall be deemed to be held.
and to have been co 11 ected or received, by the Agency as the agent of the
Noteholder, and if received by the Agency, shall forthwith be paid by the
Agency. The assignment under this Section shall not be in contravention of
any grant .or assignment pursuant to the Purchase Agreement. the Pledge
Agreement, the Agreements or the Collateral Assignments.
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ARTICLE V
COVENANTS OF THE AGENCY
Section 5.01. Punctual Payment. The Agency will punctually payor
cause to be paid (but only .out of Revenues as herein pr.ovided) the principal
and interest to become due in respect .of all the N.ote, in strict conf.ormity
with the terms of the Note and of this Resolution, and it will faithfully
observe and perf.orm all of the conditions, covenants and requirements of this
Resolution and of the Note. Nothing herein contained shall prevent the Agency
from making advances of its own moneys howsoever derived to any of the uses or
purposes referred to herei n.
pledge Se~rt i ~nl a~e'O~~y ~h~~~:t .o;nc~:-anu~~~' an~he o/g~~~y R:~~~ue,::t e~c~~~e~~
permitted by this Resoluti.on, in favor of the Noteholder.
Section 5.03. Preservation of Revenues; Amendment of Agreements,
Promissory Notes and Deeds of Trust. The Agency shall cause to be collected
promptly all amounts due trom the I'articipating Parties under the Agreements
and the Promi ssory Notes as the same become due, and sha 11 promptly and
vigorously enforce all of its rights under the Agreements, the Pr.omissory
Notes and the Deeds of Trust. Without the written consent of the Bank, the
Agency shall not amend, modify or terminate, or agree or consent to amend,
modify or terminate, the Agreements, the Promissory Notes or the Deeds of
Trust and related c.ollateral documents; but, with the written consent of the
Bank, the Agency may consent to amendments or modifications thereof.
Section 5.04. C.ompliance with Resolution. The Agency shall not issue,
or permlt to be issued, any obligation secured or payable in any manner out of
Revenues other than in accordance with the provisions of this Resoluti.on, and
shall not suffer or permit any default to occur under this Resolution, but
shall faithfully observe and perform all the covenants, conditions and
requirements hereof.
Section 5.05. Further Assurances. The Agency will adopt, make, execute
and deliver any and all such further resolutions, instruments and assurances
as may be reasonably necessary or proper to carry out the intention or to
facilitate the performance of this Resolution, and for the better assuring and
confirming unto the Holders of the Note of the rights and benefits provided in
this Resolution.
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ARTICLE VI
AMENDMENT OF RESOLUTION
Section 6.01. Amendments Permitted. This Resolution and the rights and
obligatlons of the Agency and of the Holder of the Note may be modified or
amended at any time by a Supplemental Resolution adopted by the Agency and
approved in writing by the Holder of the Note.
Section 6.02. Effect of Supplemental Resolution. From and after the
time any Supplemental Resolutl()n becomes effective pursuant to this Article
VI, this Resolution shall be deemed to be m.odified and amended in acc.ordance
therewith, and the respective rights, duties and obligations under this
Reso luti on of the Agency and the Ho lders of the Note shall thereafter be
determi ned, exerc i sed and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
Supplemental Resoluti.on shall be deemed to be part of the terms and conditions
of this Resolution for any and all purposes.
Section 6.03. Endorsement or Replacement of N.ote After Amendments. The
Noteholder may determine that the N.ote after the effective date of any action
taken as provided in this Article VI requires a notation, by endorsement or
otherwise, t.o reflect such action. In "that case, upon demand of the Holder .of
the Note and presentation of the Note for that purpose at the office of the
the Agency, a suitable notation shall be made on such Note by the Agency. The
Noteh.older may determine that a new Note, so modified as in the opinion of the
Noteholder is necessary to conform to such action, shall be prepared, executed
and de 1 ivered. In that case, upon demand of the Holder of the Note, such new
Note sha 11 be exchanged at the offi ce of the Agency, without cost to any
Noteholder, for the Note then outstanding, upon surrender of such Note.
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ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES OF NOTEHOLDER
Section 7.01. Events of Default and Acceleration of Maturities. If one
or m.ore of the followlng events ("events of default") shall happen, that is to
say
(a) Failure of Agency to pay any installment of principal or
interest or other am.ount due on the N.ote or under this Resolution within ten
days after such installment or other amOunt becomes due;
(b) Any representat i on or warranty .of Agency to the Bank under the
Note Purchase Agreement or the Agreements shall prove to have been untrue in
any material respect when made;
(c) Agency shall fail to perform or observe any of its covenants
or undertakings under this Res.olution, the Note Purchase Agreement or the
Agreements as such covenants or undertakings affect Noteholder and such
failure shall continue for a period of thirty (30) days after written notice
from Noteholder;
(d) A court having jurisdiction in the premises shall enter a
decree or .order for relief in respect of Agency, in an involuntary case under
any applicable bankruptcy, insolvency or other similar laws now or hereafter
in effect, or appointing a receiver, liquidat.or, assignee, custodian, trustee,
sequestrator (or similar official) .of Agency, or for any substantial part of
its property or ordering the winding up or liquidation of the affairs of any
of the same, and such decree .or order shall remain unstayed and in effect for
a period of thirty (30) consecutive days;
(e) Agency shall convnence a voluntary case under any applicable
bankruptcy, i nso lvency or other s imil ar 1 aw now or hereafter in effect, or
shall consent to the entry of any order for redelase of any involuntary case
under any such law, or shall consent to the appointment of a receiver,
liquidator, assignee, trustee, custodian, sequestrat.or (or similar official)
or the taking possession of any such official or any substantial part of its
property, or sha 11 make any general assignment for the benefit of cred itors,
or sha 11 fa i 1 genera lly to pay its debts as they become due or sha 11 take any
formal action in furtherance of any of the foregoing;
(f) The occurrence of any event which entitles the holder to
declare ilTlßediately due and payable all outstanding principal on any
Promissory Note;
(g) The occurrence of an Official Determination;
then, and in each and every such case during the continuance of such event of
default, the Bank or, if applicable, the subsequent Holder, may declare the
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remaining principal of the Note, and the interest accrued thereon, and any
related fees and other charges, to be due arK! payable irrrnediately, and upon
any such dec 1 arat i on the same shall become and shall be irrrned i ate ly due and
payable, anything in this Resolution or in the Note contained to the contrary
notwithstanding.
This provision, however, is subject to the condition that if, at any
time after the principal of the Note shall have been so declared due and
payable, and before any judgment .or decree for the payment of the monies due
and payable shall have been obtained or entered, there shall have been
dep.osited with the N.oteholder a sum sufficient to pay all principal .on the
N.ote due prior to such declaration and' all due and unpaid interest (if any)
upon the Note, and any re 1 ated fees and other charges and the reasonable
expenses of the Agency and Noteholder, and any arK! all other defaults known to
the Agency (other than in the payment of principal of and interest on the Note
due and payable solely by reason of such declaration) shall have been made
good or cured to the satisfaction of the Noteholder or provision deemed by the
Noteho lder to be adequate shall have been made therefor, then, and in every
such case, the Noteholder, by written notice to the Agency, may rescind and
annul such declaration and its consequences. H.owever, no such rescission and
annulment shall extend to or shall affect any subsequent default, or shall
impair or exhaust any right or power consequent thereon.
Notwithstanding any other pr.ovision of this Section 7.01, upon an event
of default relating solely to a single Loan, the Noteholder shall be entitled
to accelerate an amount of principal on the Note equal to the then outstanding
principal balance of the Promissory Note relating to such Loan, plus related
interest, fees and other charges.'
funds ~~~t~~~o~~~~' pr~~~~~a~~~n l~f s~~~~~nU)~~2A~~~1~~~iO~pon A~~ ~~~ ~~ ~~:
declaration of acceleration by the Noteholder and all Revenues thereafter
received by the Agency hereunder, shall be transmitted to the Noteh.older and
shall be applied by the Noteh.older in a manner consistent with Sections 2.02
and 2.03.
Section 7.03. Institution of Le al Pr.oceedin s b Bank. If one or more
of the events of default sha 1 happen and be continuing, the Noteholder may
proceed to protect or enforce its rights under the Act or under this
Resolution by a suit in equity or action at law, either for the specific
performance of any covenant or agreement contained herein, or in aid of the
execution of any power herein granted, or by mandamus or other appropriate
proceeding for the enforcement of any other legal or equitable remedy as the
Noteholder shall deem most effectual in support of any of its rights or duties
hereunder.
Section 7.04. Effect of Delay or Omissi.on t.o Pursue Remed~. No delay
or omission of the Noteholder to exercise any right or power arislng from any
default shall impair any such right or power or shall be construed to be a
waiver of any such default .or acquiescence therein, and every power and remedy
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given by this Article VII to the N.oteholder may be exercised from time t.o
time, and as often as shall be deemed expedient. In case the Noteholder shall
have pr.oceeded to enforce any right under this Resolution, and such
proceedings shall have been discontinued or abandoned because of waiver or for
any other reason, or shall have been determined adversely to the Noteh.older,
then and in every such case the Agency and the Noteholder shall be restored to
their former p.ositions and rights hereunder; and all remedies, rights and
p.owers of the Agency and the Noteho 1 ders shall continue as though no such
proceedings had been taken.
Section 7.05. Remedies Cumulative. No remedy herein conferred upon or
reserved to the Noteh.older is intended to be exclusive of any other remedy,
but each and every such remedy shall be cumulative and shall be in addition to
every other remedy given hereunder .or n.ow or hereafter existing at law or in
equity.
Secti.on 7.06. Control of Proceedings. In the event that the
Noteholder, upon the happening of an event of default, shall have taken some
action, by judicial proceedings or otherwise, pursuant to its rights
hereunder, it shall have full power with respect t.o the continuance,
discontinuance, withdrawal, compromise, settlement or other disp.osal of such
action.
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ARTICLE VIII
MISCELLANEOUS
Section 8.01. Benefits of Resolution Limited to Parties. Nothing in
this Res.olution, expressed or implied, is intended to give any person other
than the Agency, the Bank and the Holders of the Note, any right, remedy, or
claim under or by reason of this Resolution. Any covenants, stipulations,
promises or agreements in this Res.olution contained by and on behalf of the
Agency shall be for the sole and exclusive benefit of the Holders of the Note.
Section 8.02. Successor is Deemed Included in All References t.o
Predecessor. Whenever in this Resolution or any Supplemental Resolution
either the Agency or the Bank is named or referred to, such reference shall be
deemed to include the successors .or assigns there.of, and all the covenants and
agreements in this Resolution contained by or on behalf of the Agency or the
Bank shall bind and inure to the benefit of the respective successors and
assigns thereof whether so expressed or not.
Section 8.03. Discharge of Res.olution. If the Agency shall pay and
discharge the entire indebtedness on the Note in anyone or more of the
following ways: .
(a) by well and truly paying or causing to be paid the principal
and interest on the Note, together with applicable fees and other charges as
and when the same become due and payable; or
(b) by depositing with the Bank or, if applicable, a subsequent
Noteholder, in trust, at or before maturity, money which, together with the
amounts then on deposit in the funds and accounts pr.ovided for in Sections
3.02 and 4.02, is fully sufficient to pay the Note, including all principal,
interest and applicable fees and charges;
then the pledge of the Revenues and other funds provided for in this
Resolution and all other obligations of the Agency under this Resolution with
respect t.o the Note shall cease and terminate, subject t.o the survival of
obligations due to an Official Determination as more particularly described in
Section 2.02.
Section 8.04. Execution of Documents and Proof of Ownership by
Noteholders. Any request, declaration or other instrument which this
Resolution may require or permit to be executed by Noteholders may be in one
or more instruments of similar tenor, and shall be executed by the H.older of
the Note in person or by its attorney appointed in writing.
Except as otherwise herein expressly provided, the ownership of the Note
and the amount and date of holding the same shall be proved by the Note
Register maintained by the Agency pursuant t.o Secti.on 2.07.
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Secti.on 8.05. Waiver of Pers.onal Liability. No member. officer. agent
or e~loyee of the Agency shall be individually or personally liable for the
payment of the principal of or interest on the Note; but nothing herein
contained shall relieve any such menDer. officer. agent or ~loyee from the
performance of any official duty provided by law.
Section 8.06. N.otice and Demands on Agency. Any notice or demand which
by any provision of this Resoluti.on is required or permitted to be given or
served to or on the Agency may be given or served by being deposited p.ostage
prepaid in a post office letter box addressed (until another address is filed
by the Agency with the Noteholder) as follows: Executive Director.
Redevelopment Agency of the City of Santa Ana. 20 Civic Center Plaza. Santa
Ana. California 92706.
Section 8.07. Partial I~validit~. If any Section. paragraph. sentence.
clause or phrase of this Res.o ution shall for any reas.on be held illegal or
unenforceable. such holding shall not affect the validity of the remaining
portions of this Resolution. The Agency hereby declares that it would have
adopted this Resolution and each and every other Section. paragraph. sentence.
cl ause or phrase hereof and authorized the issuance .of the Note pursuant
thereto irrespective of the fact that anyone or roore Sections. paragraphs.
sentences. clauses or phrases of this < Res.oluti.on may be held illegal. invalid
.or unenforceable.
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Section 8.08. Effective Date of Resolution. This Resolution shall take
effect from and after the date .of its passage and adopti.on.
ADOPTED, this 15th day of December, 1981, by the following vote:
AYES:
Members: 8r;"'4r" / CnJ...1- ..h-,."~/o/ A'~",,'¿',
/';?£t::'",}'..",/ ¿vJ(,,-¿óvr-
Members: 1':1..,A-,/
NOES:
ABSENT:
Members: y-~
c~~
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Executive i rector
//-02.-
/7? ~c ~d
& -{ 58'
APPROVED AS TO FORM:
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