SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission File Number 1-13237
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
(Exact name of registrant as specified in its charter)
Delaware 13-3949418
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
625 Madison Avenue, New York, New York 10022
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 421-5333
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
------------ ------------
<S> <C> <C>
ASSETS
Participating first mortgage bonds-at fair value $423,271,442 $346,300,000
Temporary investments 3,950,000 3,500,000
Cash and cash equivalents 2,055,565 2,296,899
Interest receivable 1,183,865 879,519
Promissory notes receivable 7,471,598 7,080,265
Deferred costs, net 5,423,707 2,292,409
Other assets 58,446 41,471
------------ ------------
Total assets $443,414,623 $362,390,563
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Note payable $ 43,440,329 $ 21,445,340
Accounts payable, accrued expenses and
other liabilities 956,337 635,691
Due to affiliates 1,278,540 674,946
Distributions payable 4,735,205 4,735,120
Excess of acquired net assets over cost 2,982,708 3,231,267
------------ ------------
Total liabilities 53,393,119 30,722,364
------------ ------------
Minority interest in subsidiary
(subject to mandatory redemption) 58,000,000 0
------------ ------------
Commitment and Contingencies
Shareholders' equity:
Beneficial owner's equity-manager 176,995 24,788
Beneficial owners' equity-other shareholders
(50,000,000 shares authorized;
20,587,837 and 20,587,465 shares issued
and outstanding, respectively) 312,176,863 311,322,765
Accumulated other comprehensive income:
Net unrealized gain on first mortgage bonds 19,667,646 20,320,646
------------ ------------
Total shareholders' equity 332,021,504 331,668,199
------------ ------------
Total liabilities and shareholders' equity $443,414,623 $362,390,563
============ ============
</TABLE>
See accompanying notes to consolidated financial statements
2
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Revenues:
Interest income:
Participating first
mortgage bonds $7,128,239 $2,872,542 $19,580,311 $8,527,121
Temporary investments 57,655 32,831 162,049 105,977
Promissory notes 148,551 13,463 438,981 31,542
---------- ---------- ----------- ----------
Total revenues 7,334,445 2,918,836 20,181,341 8,664,640
---------- ---------- ----------- ----------
Expenses:
Interest expense 305,326 0 978,971 0
Management fees 0 202,656 0 607,968
Loan servicing fees 255,200 102,161 706,778 303,152
General and administrative 610,091 158,677 1,177,972 351,911
Amortization 123,802 46,180 244,792 138,541
Minority interest in
income of subsidiary 534,442 0 791,199 0
---------- ---------- ----------- ----------
Total expenses 1,828,861 509,674 3,899,712 1,401,572
---------- ---------- ----------- ----------
Net Income $5,505,584 $2,409,162 $16,281,629 $7,263,068
========== ========== =========== ==========
</TABLE>
See accompanying notes to consolidated financial statements
3
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN
SHAREHOLDERS' EQUITY
(unaudited)
<TABLE>
<CAPTION>
Beneficial
Beneficial Owners as Net Unreal-
Owner's Equity - ized Gain on
Equity- Other First Mort-
Manager Shareholders gage Bonds Total
----------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Balance at January 1, 1998 $ 24,788 $ 311,322,765 $ 20,320,646 $ 331,668,199
Net Income 1,212,381 15,069,248 0 16,281,629
Issuance of shares of beneficial 0 5,000 0 5,000
interest
Consolidation costs 0 (14,628) 0 (14,628)
Distributions (1,060,174) (14,205,522) 0 (15,265,696)
Net Change in Fair Value of
Participating First Mortgage
Bonds 0 0 (653,000) (653,000)
----------- ------------- ------------ -------------
Balance at September 30, 1998 $ 176,995 $ 312,176,863 $ 19,667,646 $ 332,021,504
=========== ============= ============ =============
</TABLE>
See accompanying notes to consolidated financial statements
4
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1998 1997
------------ -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 16,281,629 $ 7,263,068
------------ -----------
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization 244,792 138,541
Amortization of excess of acquired net
assets over cost (248,559) 0
Amortization of deferred income (49,659) (49,659)
Changes in assets and liabilities:
(Increase) decrease in interest receivable (304,346) 285,256
(Increase) decrease in other assets (16,975) 13,607
Increase (decrease) in accounts payable,
accrued expenses and other liabilities 350,463 (68,235)
Decrease in due from affiliates 0 84,225
Increase in due to affiliates 556,375 279,619
------------ -----------
Total adjustments 532,091 683,354
------------ -----------
Net cash provided by operating activities 16,813,720 7,946,422
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of participating first mortgage bonds (77,604,600) 0
Increase in deferred bond selection costs (1,658,160) 0
Net (purchase) sale of temporary investments (450,000) 3,600,000
Loans made to properties (529,972) (421,600)
Principal payments received from loans made to
properties 138,639 94,205
------------ -----------
Net cash (used in) provided by investing activities (80,104,093) 3,272,605
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions paid (15,213,392) (7,283,942)
Proceeds from note payable 77,583,230 0
Repayments of notes payable (55,588,241) 0
Increase in deferred costs relating to the
Private Label Tender Option Program (1,717,930) 0
Increase in minority interest 58,000,000 0
Consolidation costs paid (14,628) 0
------------ -----------
Net cash provided by (used in) financing activities 63,049,039 (7,283,942)
------------ -----------
(continued)
</TABLE>
See accompanying notes to consolidated financial statements
5
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1998 1997
------------ -----------
<S> <C> <C>
Net (decrease) increase in cash and
cash equivalents (241,334) 3,935,085
Cash and cash equivalents at the
beginning of period 2,296,899 249,192
------------ -----------
Cash and cash equivalents at the
end of the period $ 2,055,565 $ 4,184,277
============ ===========
SUPPLEMENTAL INFORMATION:
Interest paid $ 982,508 $ 0
============ ===========
SUPPLEMENTAL DISCLOSURE OF NONCASH
FINANCING ACTIVITIES:
Issuance of shares of beneficial
interest for trustee fees $ 5,000 $ 0
============ ===========
Distributions $(15,265,696) $(9,711,923)
Increase in distributions payable to shareholders/
partners 85 2,427,981
Increase in special distribution payable to the
Manager 52,219 0
------------ -----------
Distributions paid $(15,213,392) $(7,283,942)
============ ===========
</TABLE>
See accompanying notes to consolidated financial statements
6
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(unaudited)
NOTE 1 - General
Charter Municipal Mortgage Acceptance Company (the "Company") is a Delaware
business trust which is engaged in the acquisition and ownership (either
directly or indirectly) of tax-exempt participating and non-participating First
Mortgage Bonds ("FMBs") and other tax-exempt instruments issued by various state
or local governments or other agencies or authorities and secured by
participating and non-participating mortgage loans on the underlying properties
("Underlying Properties"). As of September 30, 1998 the Company owned a
portfolio of forty-five FMBs.
The Company was formed by the consolidation (the "Consolidation"), on October 1,
1997, of Summit Tax Exempt Bond Fund, L.P., Summit Tax Exempt L.P. II ("Tax
Exempt II") and Summit Tax Exempt L.P. III, three publicly registered limited
partnerships (the "Partnerships") co-sponsored by affiliates of Related Capital
Company ("Related"). Unless otherwise indicated, the "Company", as hereinafter
used, refers to Charter Municipal Mortgage Acceptance Company and, prior to
October 1, 1997, Tax Exempt II. Pursuant to the Consolidation, the Company
issued shares of beneficial interest (the "Shares") to all partners in each of
the Partnerships in exchange for their interests in the Partnerships based upon
each partner's proportionate interest in the Shares issued to his or its
Partnership in the Consolidation.
The Company is governed by a board of trustees comprised of two independent
managing trustees and three managing trustees who are affiliated with Related.
The Company has engaged Related Charter LP (the "Manager"), an affiliate of
Related, to manage its day-to-day affairs. Each independent trustee is entitled
to receive compensation for serving as a trustee in the aggregate amount of
$15,000 payable in cash (maximum of $5,000 per year) and/or shares of beneficial
interest valued based on the fair market value at the date of issuance. On June
4, 1998, 186 shares, having an aggregate value of $2,500, were issued to each
independent trustee relating to their services for the quarter ended December
31, 1997.
For financial accounting and reporting purposes, the Consolidation was accounted
for using the purchase method of accounting. Under this method, the Partnership
with the investor group receiving the largest ownership in the Company, in this
case Tax Exempt II, is deemed to be the acquirer. As the surviving entity for
accounting purposes, Tax Exempt II's assets and liabilities were recorded by the
Company at their historical cost, with the assets and liabilities of the other
Partnerships recorded at their estimated fair values for each Partnership.
Results of operations and other operating financial data for the Company for the
three and nine months ended September 30, 1997 is only with respect to Tax
Exempt II.
The consolidated financial statements include the accounts of the Company and
its majority owned subsidiary business trust (see Note 4). All intercompany
accounts and transactions have been eliminated in consolidation.
The accompanying financial statements have been prepared without audit. In the
opinion of management, the financial statements contain all adjustments
(consisting of only normal recurring adjustments) necessary to present fairly
the financial position of the Company as of September 30,
7
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(unaudited)
1998, the results of its operations for the three and nine months ended
September 30, 1998 and 1997 and its cash flows for the nine months ended
September 30, 1998 and 1997. However, the operating results for the interim
periods may not be indicative of the results for the full year.
Certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these financial
statements should be read in conjunction with the financial statements and notes
thereto included in the Company's Form 10-K/A-1 for the year ended December 31,
1997.
Certain reclassifications have been made to prior year amounts to conform to the
current year's presentation.
NOTE 2 - Participating First Mortgage Bonds ("FMBs")
The Company accounts for its investments in the FMBs as "available for sale"
debt securities under the provisions of Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities" ("SFAS 115"). Accordingly, investments in FMBs are carried at their
estimated fair values, with unrealized gains and losses reported in a separate
component of shareholders'equity.
Because the FMBs are not readily marketable, the Company estimates fair value
for each bond as the present value of its expected cash flows using a discount
rate for comparable tax-exempt investments. This process is based upon
projections of future economic events affecting the real estate collateralizing
the bonds, such as property occupancy rates, rental rates, operating cost
inflation and market capitalization rates, and upon determination of an
appropriate market rate of interest, all of which are based on good faith
estimates and assumptions developed by the Manager. Changes in market conditions
and circumstances may occur which would cause these estimates and assumptions to
change, therefore, actual results may vary from the estimates and the variance
may be material.
As of September 30, 1998, the Company owned forty-five FMBs which are secured by
mortgages on apartment complexes in thirteen different states across the
continental United States. The face amount of the FMBs ranges from $2,275,000 to
$19,450,000 with carrying amounts from $2,275,000 to $20,571,000. The FMBs have
maturity dates from December 2003 through September 2040, however, four FMBs are
presently callable and the remainder are callable from December 1998 to October
2025. The stated interest rates range from 4.87% to 8.5%. The weighted average
interest rate recognized on the face amount of the portfolio of FMBs for the
three and nine months ended September 30, 1998 and 1997 was 6.98% and 7.09% and
6.93% and 7.01%, respectively.
The original obligors and owners of the Underlying Properties of ten of the
Company's FMBs have been replaced with affiliates of the Manager who have not
made equity investments. These entities have assumed the day to day
responsibilities and obligations of the Underlying Properties. These properties
are generally paying as interest an amount equal to the net cash flow generated
by operations, which in some cases is not equal to the stated rate of the FMB.
The Company has no present intention of declaring a default under these FMBs.
8
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(unaudited)
From time to time, the Company enters into forbearance agreements and/or
permanent modifications with certain borrowers. The determination as to whether
it is in the best interest of the Company to enter into permanent modifications
or forbearance agreements on the FMBs, advance second mortgages, or
alternatively, to pursue its remedies under the loan documents, including
foreclosure, is based upon several factors. These factors include, but are not
limited to, Underlying Property performance, owner cooperation and projected
costs of foreclosure and litigation. Payments under each of the existing
forbearance agreements are current as of September 30, 1998.
Effective January 1, 1998, the Highland Ridge, Willow Creek, Bristol Village and
Thomas Lake FMBs were modified to (i) reflect a change in their stated interest
rates, (ii) allow for deferred base and other interest accrued and unpaid
through December 1997 to be paid at maturity or upon an event of sale or
refinancing and (iii) extend the mandatory call and prepayment lock-out dates.
In addition, the maturities of the Highland Ridge and Willow Creek FMBs were
extended to 2018 and 2022, respectively, and the maturities of the Bristol
Village and Thomas Lake FMBs were extended to 2027 with mandatory call dates at
January 2010. The Company is currently anticipating modifying certain other
FMBs, with terms generally similar to those above, where and as appropriate.
Certain of the Company's other FMBs have been previously modified. These
modifications have generally encompassed an extension of the maturity together
with a prepayment lock out feature and/or prepayment penalties together with an
extension of the mandatory redemption feature (5-10 years from modification).
Stated interest rates have also been adjusted together with the participation
and contingent interest features. Base interest rates, contingent interest,
prepayment lock-outs, mandatory redemption and maturity features vary dependent
on the facts of a particular FMB, the developer, the Underlying Property's
performance and requirements of bond counsel and local issuers.
In addition to the stated base rates of interest, certain of the FMBs provide
for "contingent interest". During the nine months ended September 30, 1998 and
1997, six and three FMBs paid contingent interest amounting to approximately
$541,000 and $186,000, respectively.
With respect to the FMBs which are subject to forbearance agreements, the
difference between the stated interest rates and the rates paid (whether
deferred and payable out of available future cash flow or, ultimately, from sale
or refinancing proceeds) on FMBs is not accrued for financial statement
purposes. The accrual of interest at the stated interest rate will resume once
an Underlying Property's ability to pay the stated rate has been adequately
demonstrated. Unrecorded contractual interest income was approximately
$2,333,000 and $1,087,000 for the nine months ended September 30, 1998 and 1997,
respectively.
From time to time the Company has advanced funds to owners of certain Underlying
Properties in order to preserve the underlying asset including completion of
construction and/or when Underlying Properties have experienced operating
difficulties including past due real estate taxes and/or deferred maintenance
items. Such advances typically are secured by promissory notes and/or second
mortgages. As of September 30, 1998, the face amount of such
9
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(unaudited)
advances was $12,696,162, and their carrying value was $7,471,598, which is net
of purchase accounting adjustments, and a reserve for collectibility of
$452,119.
During the period January 1, 1998 through September 30, 1998 the Company
acquired thirteen FMBs for an aggregate purchase price of $77,604,600, not
including bond selection fees and expenses of approximately $1,665,000. The
purchases were financed primarily from borrowings under the Interim Credit
Facility (see Note 5). Further information regarding the thirteen FMBs is as
follows:
<TABLE>
<CAPTION>
Stated No. of
Project Closing Call Date/ Face Interest Rental
Name Date Maturity Date Amount of Bond Rate Units
- --------------- ------- ------------- --------------- -------- -------
<S> <C> <C> <C> <C> <C>
Ocean Air 1/1/16/
Norfolk, VA 4/20/98 11/1/30 $10,000,000 7.25% 434
Phoenix 11/1/16/
Stockton, CA 4/28/98 10/1/29 $ 3,250,000 7.125% 184
Stone Creek 5/1/17/
Watsonville, CA 4/28/98 4/1/40 $ 8,820,000 7.125% 120
Cedarbrook 5/1/17/
Hanford, CA 4/28/98 5/1/40 $ 2,840,000 7.125% 70
Marsh Landings 7/1/17/
Portsmouth, VA 5/20/98 7/1/30 $ 6,050,000 7.25% 250
College Park 7/1/25/
Naples, FL 7/15/98 7/1/40 $10,100,000 (a) 210
Gulfstream 1/1/17/
Dania, FL 7/22/98 7/1/38 $ 3,500,000 7.25% 96
Bedford Square 9/1/17/
Clovis, CA 8/25/98 8/1/40 $ 3,850,000 (b) 130
Northpointe Village 9/1/17/
Fresno, CA 8/25/98 8/1/40 $13,250,000 (c) 406
Falcon Creek 9/1/16/
Indianapolis, IN 9/14/98 8/31/38 $ 6,144,600 (d) 131
Jubilee Courtyards 10/1/25/
Florida City, FL 9/15/98 9/1/40 $ 4,150,000 (e) 98
10
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(unaudited)
Stated No. of
Project Closing Call Date/ Face Interest Rental
Name Date Maturity Date Amount of Bond Rate Units
- --------------- ------- ------------- --------------- -------- -------
Silvercrest 10/1/17/
Clovis, CA 9/24/98 9/1/40 $ 2,275,000 7.125% 100
Carrington Pointe 10/1/17/
Los Banos, CA 9/24/98 9/1/40 $ 3,375,000 6.375% 80
-----------
$77,604,600
===========
</TABLE>
(a) The interest rates for College Park are 7% during the construction period
and 7.25% thereafter.
(b) The interest rates for Bedford Square are 7% during the construction
period and 6.375% thereafter.
(c) The interest rates for Northpointe Village are 7.965% through September
23, 1998, 8.125% during the remainder of the construction period and 7.5%
thereafter.
(d) The interest rates for Falcon Creek are 7% through August 31, 2000 and
7.25% thereafter.
(e) The interest rates for Jubilee Courtyards are 7% through September 30,
2000 and 7.125% thereafter.
The cost basis of the Company's portfolio of forty-five and thirty-two FMBs at
September 30, 1998 and December 31, 1997 was $403,603,796 and $325,979,355,
respectively. The net unrealized gain on FMBs at September 30, 1998 consists of
gross unrealized gains and losses of $28,331,175 and $8,663,529, respectively.
The net unrealized gain on FMBs at December 31, 1997 consists of gross
unrealized gains and losses of $28,984,175 and $8,663,529, respectively.
NOTE 3 - Deferred Costs
The components of deferred costs are as follows:
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
----------- -----------
<S> <C> <C>
Deferred bond selection costs $ 5,415,124 $ 3,756,964
Deferred costs relating to the Private Label Tender
Option Program (see Note 4) 2,260,157 542,227
----------- -----------
7,675,281 4,299,191
Less: Accumulated amortization (2,251,574) (2,006,782)
----------- -----------
$ 5,423,707 $ 2,292,409
=========== ===========
</TABLE>
11
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(unaudited)
NOTE 4 - Minority Interest In Subsidiary
On May 21, 1998, the Company closed on its Private Label Tender Option Program
("TOP") in order to raise additional capital of up to $150 million to acquire
additional First Mortgage Bonds. The initial transaction with respect to the TOP
involved the contribution by the Company of thirteen issues of FMBs owned by the
Company in the aggregate principal amount of $144,625,000 to a Delaware business
trust (the "Origination Trust"), a wholly owned subsidiary of the Company, which
immediately contributed eleven of those FMBs to another Delaware business trust
(the "Owner Trust") , a wholly owned subsidiary of the Origination Trust. The
Origination Trust had originally contributed all thirteen issues of FMBs to the
Owner Trust, but pursuant to a Rescission Agreement between the Origination
Trust and the Owner Trust dated as of November 1, 1998 the contribution of two
of the issues of FMBs with an aggregate principal balance of $3,310,000 was
rescinded effective as of May 21, 1998. The Owner Trust issued two certificates:
a Senior Certificate, with an outstanding face amount of $58,000,000, which was
itself deposited into another Delaware business trust (the "Certificate Trust")
which issued and sold Floater Certificates representing proportional interests
in the Senior Certificate to new investors; and a Residual Certificate
representing the remaining beneficial ownership interest in the FMBs, which was
issued to the Origination Trust, whose sole owner is the Company. At the same
time, the Owner Trust acquired a municipal bond insurance policy from MBIA to
credit enhance Certificate distributions for the benefit of the holders of the
Floater Certificates and also arranged for a liquidity facility, issued by a
consortium of highly rated European banks, with respect to the Floater
Certificates. The Floater Certificates were privately placed raising
$58,000,000, which proceeds were used by the Company to repay outstanding debt
under the Interim Credit Facility and to acquire additional FMBs.
The end result of the transaction is that a portion of the interest received by
the Owner Trust on the FMBs contributed to the Owner Trust is distributed
through the Senior Certificate to the holders of the Floater Certificates in an
amount determined each week by the remarketing agent ("Goldman Sachs & Co."), as
the distribution amount that is necessary (but not greater than necessary) to
enable the remarketing agent to sell the Floater Certificates at par on any
weekly determination date.
For financial accounting and reporting purposes, the Senior Certificate is
classified as "minority interest in subsidiary (subject to mandatory
redemption)" in the accompanying consolidated balance sheets. Income is
allocated first to the minority interest in an amount equal to the distribution
through the Senior Certificate to the holders of the Floater Certificates. Such
special allocation of income is classified as "minority interest in income of
subsidiary" in the accompanying consolidated statements of income. Deferred
costs relating to the TOP are being amortized using the straight line method
over 10 years, which approximates the average remaining term to maturity of the
FMBs contributed or expected to be contributed to the Owner Trust.
It is anticipated that when the Company has need of additional capital it will
either: (1) cause the Owner Trust to increase the outstanding face amount of the
Senior Certificate from $58,000,000 to no more than 50% of the value of the FMBs
currently owned by the Origination Trust and Owner Trust; or (2) contribute
additional FMBs to the Origination Trust or the Owner Trust and cause an
increase in the outstanding face amount of the Senior Certificate to an amount
that will then be no more than 50% of the aggregate value of the FMBs then owned
12
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(unaudited)
by the Origination Trust and the Owner Trust. The maximum amount of Floater
Certificates that may be issued to raise capital under the TOP is up to $150
million.
The cost of funds relating to the TOP was 4.89% for the period May 21, 1998
(inception) through September 30, 1998.
NOTE 5 - Note Payable
Until the Company causes the Owner Trust to increase the outstanding face amount
of the Senior Certificate, an interim credit facility with Goldman Sachs &
Company (the "Interim Credit Facility") is available to the Company at
prevailing rates of interest for such accounts. At September 30, 1998, the
interest rate was 6.23% and the outstanding balance was $43,440,329. It is
anticipated that all or most of the current outstanding balance under the
Interim Credit Facility, which is secured by certain of the Company's FMBs, will
be repaid with proceeds from the TOP. It is, however, payable on demand. From
time to time based on interim funding needs, the Company may draw down
additional amounts from the Interim Credit Facility in the future.
The outstanding face amount of the Senior Certificate and indebtedness under the
Interim Credit Facility, together with any other leveraging of the Company, will
not exceed 50% of the Company's total Market Value (as defined in the Trust
Agreement) as of the date incurred.
NOTE 6 - Related Parties
Charter Municipal Mortgage Acceptance Company (After the Consolidation)
Pursuant to the Management Agreement, the Manager receives (i) bond selection
fees equal to 2% of the principal amount of each FMB or other tax-exempt
instrument acquired or originated by the Company; (ii) special distributions
equal to .375% of total invested assets of the Company; (iii) loan servicing
fees equal to .25% of the outstanding principal amount of FMBs; (iv) a
liquidation fee based on the gross sales price of assets sold by the Company in
connection with a liquidation of the Company's assets; and (v) reimbursement of
certain administrative costs incurred by the Manager and its affiliates on
behalf of the Company. In addition, the Manager receives bond placement fees
from the borrower in an amount equal to 1% of the principal amount of each FMB
or other tax-exempt instrument acquired or originated by the Company and
affiliates of the Manager are part of a joint venture which has a development
services agreement with the obligors of two FMBs.
The costs, expenses and the special distribution incurred to the Manager and its
affiliates for the three and nine months ended September 30, 1998 were as
follows:
Three Months Ended Nine Months Ended
September 30, 1998 September 30, 1998
------------------ ------------------
Bond selection fees $ 932,892 $1,552,092
Expense reimbursement 94,000 256,734
Loan servicing fees 255,200 706,778
Special distribution 382,799 1,060,166
---------- ----------
$1,664,891 $3,575,770
========== ==========
13
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(unaudited)
Tax Exempt II (Prior to the Consolidation)
Prior to the Consolidation, the general partners of Tax Exempt II were Related
Tax Exempt Associates II, Inc., a Delaware corporation (the "Related General
Partner"), and Prudential Bache Properties, Inc. ("PBP"), together (the "General
Partners"). The General Partners managed and controlled the affairs of Tax
Exempt II prior to the Consolidation.
The General Partners and their affiliates performed services for Tax Exempt II
which included, but were not limited to: accounting and financial management;
registrar, transfer and assignment functions; asset management; investor
communications; printing and other administrative services. The General Partners
and their affiliates received reimbursements for costs incurred in connection
with these services, the amount of which was limited by the provisions of the
partnership agreement of Tax Exempt II. The General Partners were paid, in
aggregate, an annual management fee equal to .5% of the total invested assets
(which equaled the total original face amount of the FMBs). An affiliate of the
Related General Partner received loan servicing fees in an amount of .25% per
annum of the principal amount outstanding on mortgage loans serviced by the
affiliate.
The costs and expenses incurred by Tax Exempt II to related parties for the
three and nine months ended September 30, 1997 were as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, 1997 September 30, 1997
------------------ ------------------
<S> <C> <C>
PBP and affiliates
General and administrative $ 23,448 $ 58,170
Management fee 101,328 303,984
---------- ----------
124,776 362,154
---------- ----------
Related General Partner
and affiliates
General and administrative 34,913 66,222
Management fee 101,328 303,984
Loan servicing fee 102,161 303,152
---------- ----------
238,402 673,358
---------- ----------
$ 363,178 $1,035,512
========== ==========
</TABLE>
General
The obligors of the Suntree, Players Club, River Run, Ocean Air, Phoenix, Stone
Creek, Cedarbrook, Marsh Landings, Gulfstream, Bedford Square, Northpointe
Village, Falcon Creek, Jubilee Courtyards, Silvercrest and Carrington Pointe
FMBs are local partnerships in which investment partnerships, whose general
partners are affiliates of the Manager, own a controlling partnership interest.
As of September 30, 1998, the original owners of the Underlying Properties and
obligors of the Cedar Creek, Cypress Run, Highpointe, Greenway Manor, Sunset
Terrace, Pelican Cove, Loveridge, Sunset Downs, Sunset Creek and Sunset Village
FMBs had been replaced with affiliates of the Manager who have not made equity
investments. These entities have assumed the day-to-day responsibilities and
obligations of the Underlying Properties. Buyers are being
14
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(unaudited)
sought who would make equity investments in the Underlying Properties and assume
the nonrecourse obligations for the FMB.
NOTE 7 - Comprehensive Income
The Company adopted Statement of Financial Accounting Standards No. 130,
"Reporting Comprehensive Income" in the first quarter of 1998. The Company's
only element of other comprehensive income is the change in the unrealized gain
or loss on the Company's FMBs. Thus, comprehensive income, which consists of net
income plus or minus other comprehensive income, for the three and nine months
ended September 30, 1998 and 1997 was $5,505,584 and $2,409,162 and $15,628,629
and $7,263,068, respectively.
NOTE 8 - Earnings Per Share
Basic income per share in the amount of $.25 and $.73 is computed based on the
net income for the three and nine months ended September 30, 1998 ($5,505,584
and $16,218,629, respectively), less the special allocations to the Manager
($434,027 and $1,212,381, respectively), divided by the weighted average number
of shares outstanding for the period (20,587,837 and 20,587,627, respectively).
Net income per unit information for 1997 is not presented because it is not
indicative of the Company's continuing capital structure.
As the Company has only one type of Equity security outstanding at September 30,
1998, diluted net income per share is the same as basic net income per share.
NOTE 9 - Commitment and Contingencies
As part of the settlement of class action litigation relating to the
Partnerships, counsel ("Class Counsel") for the partners of the Partnerships
have the right to petition the United States District Court for the Southern
District of New York (the "Court") for additional attorneys' fees ("Counsel's
Fee Shares") in an amount to be determined in the Court's sole discretion. The
Counsel's Fee Shares will be based upon a percentage (which Class Counsel have
said they will propose to be 25%) of the increase in value of the Company, ("the
Added Value") if any, as of October 1, 1998 based upon the difference between
(i) the trading prices of the Company's shares of beneficial interest during the
six month period ended October 1, 1998 and (ii) the trading prices of the
limited partnership units and the asset values of the Partnerships prior to
10/1/97. One-half of such fees, if any, will be paid in the form of Restricted
Securities (restricted only with respect to the sale, assignment, pledge or
other transfer of such securities) and the remaining one-half of such fees will
be paid in the form of unrestricted securities. The number of Counsel's Fee
Shares issued shall be subject to a maximum amount not to exceed 3.95% of the
total number of outstanding shares of the Company on October 1, 1998. The
Counsel's Fee Shares will be distributed to Class Counsel quarterly in eight
equal distributions commencing thirty days after October 1, 1998 and
restrictions on the Restricted Securities expire one year from the date of
issuance. As of October 1, 1998, 25% of the Added Value amounted to
approximately $3,900,000. As of November 13, 1998, Class Counsel has not filed a
petition for Counsel's Fee Shares and there can be no assurance as to what
action the Court would take if and when such petition is filed. Accordingly,
management cannot determine with any certainty at this time the amount of
shares, if any, that might be issued under this arrangement.
15
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(unaudited)
NOTE 10 - Subsequent Events
On October 9, 1998, the Board of Trustees authorized the implementation of a
stock repurchase plan, enabling the Company to repurchase, from time to time, up
to 1,500,000 of its shares of beneficial interest. The repurchases will be made
in the open market and the timing will be dependant on the availability of
shares and other market conditions. During the period October 9, 1998 through
November 13, 1998 the Company did not acquire any of its shares of beneficial
interest. Any repurchased shares will be accounted for as treasury shares of
beneficial interest.
During the period October 1, 1998 through November 13, 1998 the Company acquired
one FMB for a purchase price of $14,000,000, not including bond selection fees
and expenses of approximately $280,000. The obligor of the FMB is a local
partnership in which an investment partnership, whose general partner is an
affiliate of the Manager, owns a controlling partnership interest. The purchase
was financed primarily from borrowing under the Interim Credit Facility.
Further information regarding the FMB is as follows:
<TABLE>
<CAPTION>
Stated No. of
Project Closing Call Date/ Face Interest Rental
Name Date Maturity Date Amount of Bond Rate Units
- ---------------- -------- ------------- -------------- -------- ------
<S> <C> <C> <C> <C> <C>
Madalyn 11/13/98 12/1/17 $14,000,000 7% 304
Landings 12/1/40
Palm Bay, FL
</TABLE>
16
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
When used in this quarterly report on Form 10-Q, the words "believes,"
"anticipates," "expects" and similar expressions are intended to identify
forward-looking statements. Statements looking forward in time are included in
this quarterly report on Form 10-Q pursuant to the "safe harbor" provision of
the private securities litigation reform act of 1995. Such statements are
subject to certain risks and uncertainties which could cause actual results to
differ materially, including, but not limited to, those set forth in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations." Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. The Company
undertakes no obligation to publicly revise these forward-looking statements to
reflect events or circumstances occurring after the date hereof or to reflect
the occurrence of unanticipated events.
Liquidity and Capital Resources
Charter Municipal Mortgage Acceptance Company (the "Company") is a Delaware
business trust which is engaged in the acquisition and ownership (either
directly or indirectly) of tax-exempt participating and non-participating First
Mortgage Bonds ("FMBs") and other tax-exempt instruments issued by various state
or local governments or other agencies or authorities and secured by
participating and non-participating mortgage loans on the underlying properties
("Underlying Properties"). As of September 30, 1998, the Company owned
forty-five FMBs and had net assets of approximately $332,022,000.
The Company was formed by the consolidation (the "Consolidation"), on October 1,
1997, of Summit Tax Exempt Bond Fund, L.P. ("Tax Exempt I"), Summit Tax Exempt
L.P. II ("Tax Exempt II") and Summit Tax Exempt L.P. III ("Tax Exempt III"),
three publicly registered limited partnerships (the "Partnerships") co-sponsored
by affiliates of Related Capital Company ("Related").
In order to generate increased tax exempt income and as a result enhance the
value of the Company's stock, the Company intends to originate and acquire
additional tax-exempt bonds secured by multifamily properties. The Company
believes that it can earn above market rates of interest on its bond
acquisitions by focusing its efforts primarily on affordable housing. The
Manager estimates that nearly 90% of all new multifamily development contains an
affordable component which produces tax credits pursuant to Section 42 of the
Internal Revenue Code. The Company has designed a Direct Purchase Program
specifically designed to appeal to developers of such properties. In general,
these properties are smaller than traditional multifamily housing properties,
averaging 150 units. The traditional method of financing tax-exempt properties
requires the involvement of credit enhancement, rating agencies and investment
bankers. Therefore, the up-front cost of such financing is generally much higher
than traditional multifamily financing. Through its Direct Purchase Program, the
Company will originate and acquire tax-exempt bonds without the cost associated
with credit enhancement, rating agencies and investment bankers. The Company
believes that the up-front cost savings to the developer will translate into a
higher than market interest rate on the bonds acquired by the Company.
The Company does not operate as a mortgage REIT, which generally utilize high
levels of leverage and acquire subordinated interests in commercial and/or
residential mortgage- backed securities. Rather, the Company utilizes low levels
of leverage and generally originates and acquires long-term, fixed-rate,
tax-exempt FMBs. As a result, the Company does not expect to experience the
ill-effects associated with the current volatile interest rate environment.
17
<PAGE>
Pursuant to its trust agreement, the Company is only able to incur leverage or
other financing up to 50% of the Company's Total Market Value (as defined in the
Trust Agreement), as compared to mortgage REITs which typically incur leverage
at ratios ranging from between 4:1 to 10:1. In general, the FMBs that the
Company either originates or acquires call for ten-year restrictions from
prepayments, eliminating the Company's susceptibility to significant levels of
repayment risk as a result of interest rate reductions. Consistent with the
foregoing, the Company focuses on providing investors with a stable level of
distributions, even through unstable markets.
Due to the Company's low level of leverage, the Company does not anticipate that
it will be affected by the recent lack of liquidity that is currently impairing
mortgage REITS and its portfolio does not contain assets that are especially
vulnerable to volatility during periods of interest rate fluctuations.
On May 21, 1998, the Company closed on its Private Label Tender Option Program
("TOP") in order to raise additional capital of up to $150 million to acquire
additional First Mortgage Bonds ("FMBs"). The initial transaction with respect
to the TOP involved the contribution by the Company of thirteen issues of FMBs
owned by the Company in the aggregate principal amount of $144,625,000 to a
Delaware business trust (the "Origination Trust"), a wholly owned subsidiary of
the company, which immediately contributed eleven of those FMBs to another
Delaware business trust (the "Owner Trust") , a wholly owned subsidiary of the
Origination Trust. The Origination Trust had originally contributed all thirteen
issues of FMBs to the Owner Trust, but pursuant to a Rescission Agreement
between the Origination Trust and the Owner Trust dated as of November 1, 1998
the contribution of two of the issues of FMBs with an aggregate principal
balance of $3,3100,000 was rescinded effective as of May 21, 1998. The Owner
Trust issued two certificates: a Senior Certificate, with an outstanding face
amount of $58,000,000, which was itself deposited into another Delaware business
trust (the "Certificate Trust") which issued and sold Floater Certificates
representing proportional interests in the Senior Certificate to new investors;
and a Residual Certificate representing the remaining beneficial ownership
interest in the FMBs, which was issued to the Origination Trust, whose sole
owner is the Company. At the same time, the Owner Trust acquired a municipal
bond insurance policy from MBIA to credit enhance Certificate distributions for
the benefit of the holders of the Floater Certificates and also arranged for a
liquidity facility, issued by a consortium of highly rated European banks, with
respect to the Floater Certificates. The Floater Certificates were privately
placed raising $58,000,000, which proceeds were used by the Company to repay
outstanding debt under the Interim Credit Facility and to acquire additional
FMBs.
The end result of the transaction is that a portion of the interest received by
the Owner Trust on the FMBs contributed to the Owner Trust is distributed
through the Senior Certificate to the holders of the Floater Certificates in an
amount determined each week by the remarketing agent ("Goldman Sachs & Co."), as
the distribution amount that is necessary (but not greater than necessary) to
enable the re-marketing agent to sell the Floater Certificates at par on any
weekly determination date.
It is anticipated that when the Company has need of additional capital it will
either: (1) cause the Owner Trust to increase the outstanding face amount of the
Senior Certificate from $58,000,000 to no more than 50% of the value of the FMBs
currently owned by the Origination Trust and the Owner Trust; or (2) contribute
additional FMBs to the Origination Trust or the Owner Trust and cause an
increase in the outstanding face amount of the Senior Certificate to an amount
that will then be no more than 50% of the aggregate value of the FMBs then owned
18
<PAGE>
by the Origination Trust and the Owner Trust. The maximum amount of Floater
Certificates that may be issued to raise capital under the TOP is up to $150
million.
The cost of funds relating to the TOP was 4.89% for the period May 21, 1998
(inception) through September 30, 1998.
Until the Company causes the Owner Trust to increase the outstanding face amount
of the Senior Certificate, an interim credit facility with Goldman Sachs &
Company (the "Interim Credit Facility") is available to the Company at
prevailing rates of interest for such accounts. At September 30, 1998, the
interest rate was 6.23% and the outstanding balance was $43,440,329. It is
anticipated that all or most of the current outstanding balance under the
Interim Credit Facility, which is secured by certain of the Company's FMBs, will
be repaid with proceeds from the TOP. It is, however, payable on demand. From
time to time based on interim funding needs, the Company may draw down
additional amounts from the Interim Credit Facility in the future.
Although the TOP may be increased, the Company's Trust Agreement dictates that
the outstanding face amount of the Senior Certificate and indebtedness under the
Interim Credit Facility, together with any other leveraging of the Company, will
not exceed 50% of the Company's total Market Value (as defined in the Trust
Agreement) as of the date incurred.
During the period January 1, 1998 through November 13, 1998 the Company acquired
fourteen FMBs for an aggregate purchase price of $91,604,600, not including bond
selection fees and expenses of approximately $1,945,000. The purchases were
financed primarily from borrowings under the Interim Credit Facility.
During the nine months ended September 30, 1998, cash and cash equivalents of
the Company decreased approximately $241,000. This decrease was primarily due to
the purchase of participating FMBs ($77,605,000), an increase in deferred bond
selection costs ($1,658,000), the net purchase of temporary investments
($450,000), loans made to properties ($530,000), an increase in deferred costs
relating to the TOP ($1,718,000) and distributions paid ($15,213,000) which
exceeded cash provided by operating activities ($16,814,000), principal
repayments received from loans made to Underlying Properties ($139,000), an
increase in minority interest ($58,000,000) and net proceeds from note payable
($21,995,000). Included in the adjustments to reconcile the net income to cash
provided by operating activities is amortization in the amount of $53,000.
Future liquidity is expected to result from cash generated from the Company's
portfolio of FMBs and interest earned on funds invested in short-term tax-exempt
money market instruments. The Company has entered into forbearance agreements on
several FMBs and may be required to extend these agreements or enter into new
agreements in the future. Such agreements may adversely impact liquidity;
however interest payments from FMBs are anticipated to provide sufficient
liquidity to fund the Company's operating expenditures, debt service and
distributions in future years.
Effective January 1, 1998, the Highland Ridge, Willow Creek, Bristol Village and
Thomas Lake FMBs were modified to (i) reflect a change in their stated interest
rates, (ii) allow for deferred base and other interest accrued and unpaid
through December 1997 to be paid at maturity or upon an event of sale or
refinancing and (iii) extend the mandatory call and prepayment lock-out dates.
In addition, the maturities of the Highland Ridge and Willow Creek FMBs were
extended to 2018 and 2022, respectively, and the maturities of the Bristol
Village and Thomas Lake FMBs were extended to 2027 with mandatory call dates at
January 2010. The Company is
19
<PAGE>
currently anticipating modifying certain other FMBs, with terms generally
similar to those above, where and as appropriate.
As part of the settlement of class action litigation relating to the
Partnerships, counsel ("Class Counsel") for the partners of the Partnerships
have the right to petition the United States District Court for the Southern
District of New York (the "Court") for additional attorneys' fees ("Counsel's
Fee Shares") in an amount to be determined in the Court's sole discretion. The
Counsel's Fee Shares will be based upon a percentage (which Class Counsel have
said they will propose to be 25%) of the increase in value of the Company, ("the
Added Value") if any, as of October 1, 1998 based upon the difference between
(i) the trading prices of the Company's shares of beneficial interest during the
six month period ended October 1, 1998 and (ii) the trading prices of the
limited partnership units and the asset values of the Partnerships prior to
10/1/97. One-half of such fees, if any, will be paid in the form of Restricted
Securities (restricted only with respect to the sale, assignment, pledge or
other transfer of such securities) and the remaining one-half of such fees will
be paid in the form of unrestricted securities. The number of Counsel's Fee
Shares issued shall be subject to a maximum amount not to exceed 3.95% of the
total number of outstanding shares of the Company on October 1, 1998. The
Counsel's Fee Shares will be distributed to Class Counsel quarterly in eight
equal distributions commencing thirty days after October 1, 1998 and
restrictions on the Restricted Securities expire one year from the date of
issuance. As of October 1, 1998, 25% of the Added Value amounted to
approximately $3,900,000. As of November 13, 1998, Class Counsel has not filed a
petition for Counsel's Fee Shares and there can be no assurance as to what
action the Court would take if and when such petition is filed. Accordingly,
management cannot determine with any certainty at this time the amount of
shares, if any, that might be issued under this arrangement.
In November 1998, a distribution of $4,735,205 (.23 per share), which was
declared in September 1998, was paid to the shareholders from cash flow from
operations for the quarter ended September 30, 1998.
On October 9, 1998, the Board of Trustees authorized the implementation of a
stock repurchase plan, enabling the Company to repurchase, from time to time, up
to 1,500,000 shares of beneficial interest. The repurchases will be made in the
open market and the timing will be dependant on the availability of shares and
other market conditions. During the period October 9, 1998 through November 13,
1998 the Company did not acquire any of its shares of beneficial interest. Any
repurchased shares will be accounted for as treasury shares of beneficial
interest.
Management is not aware of any trends or events, commitments or uncertainties,
which have not otherwise been disclosed that will or are likely to impact
liquidity in a material way.
Results of Operations
For the three and nine months ended September 30, 1998 as compared to 1997,
total revenues, total expenses and net income increased and the results of
operations are not comparable due to the Consolidation of Tax Exempt II with two
other Partnerships on October 1, 1997, which resulted in the formation of the
Company, and the acquisition of fourteen FMBs after the Consolidation. The
Company's results of operations for the three and nine months ended September
30, 1998 consisted primarily of the results of the Company's investment in
forty-five FMBs. The Company's results of operations for the three and nine
months ended September 30, 1997 consisted primarily of the results of Tax Exempt
II's investment in fifteen FMBs.
Interest income from FMBs increased approximately $4,256,000 and $11,053,000,
respectively, for the three and nine months ended September 30, 1998 as compared
to 1997. Increases of $3,261,000 and $9,574,000, respectively, were due to the
sixteen FMBs acquired from Tax Exempt II and Tax Exempt III in the Consolidation
(the "Tax Exempt II and III Acquisitions") and increases of $1,022,000 and
$1,588,000, respectively, were due to the acquisition of fourteen FMBs after the
Consolidation (the "New Acquisitions"). Excluding these acquisitions, interest
income from FMBs decreased approximately 1% for both the three and nine months
ended September 30, 1998 as compared to 1997.
Interest income from temporary investments increased approximately $25,000 and
$56,000, respectively, for the three and nine months ended September 30, 1998 as
compared to 1997 primarily due to higher invested cash balances in 1998.
Interest income from promissory notes increased approximately $135,000 and
$407,000, respectively, for the three and nine months ended September 30, 1998
as compared to 1997. Increases of $136,000 and $408,000, respectively, were due
to the Tax Exempt II and III Acquisitions. Excluding these acquisitions,
interest income from promissory notes decreased approximately $1,000 for both
the three and nine months ended September 30, 1998 as compared to 1997.
Interest expense in the amounts of approximately $305,000 and $979,000 was
recorded for the three and nine months ended September 30, 1998 relating to the
Interim Credit Facility.
Management fees incurred to the General Partners of Tax Exempt II in the amounts
of approximately $203,000 and $608,000 were recorded for the three and nine
months ended September 30, 1997.
20
<PAGE>
Loan servicing fees increased approximately $153,000 and $404,000, respectively,
for the three and nine months ended September 30, 1998 as compared to 1997
entirely due to the Tax Exempt II and III Acquisitions and the New Acquisitions.
General and administrative expenses increased approximately $451,000 and
$826,000, respectively, for the three and nine months ended September 30, 1998
as compared to 1997. These increases were primarily due to current fees relating
to the TOP, an increase in printing and investor service expenses resulting from
an increase in investors, an increase in insurance expense and an increase in
audit/tax fees and expense reimbursements to the Manager and its affiliates due
to the Tax Exempt II and III Acquisitions and the New Acquisitions.
Amortization increased approximately $78,000 and $106,000, respectively, for the
three and nine months ended September 30, 1998 as compared to 1997 primarily due
to amortization of deferred bond selection costs relating to the New
Acquisitions and amortization of deferred costs relating to the TOP.
Minority interest in income of subsidiary in the amounts of approximately
$534,000 and $791,000 were recorded for the three and nine months ended
September 30, 1998.
General
The determination as to whether it is in the best interest of the Company to
enter into forbearance agreements on the FMBs or, alternatively, to pursue its
remedies under the loan documents, including foreclosure, is based upon several
factors including, but not limited to, Underlying Property performance, owner
cooperation and projected legal costs.
The difference between the stated interest rates and the rates paid by FMBs is
not accrued as interest income for financial reporting purposes. The accrual of
interest at the stated interest rate will resume once an Underlying Property's
ability to pay the stated rate has been adequately demonstrated. Interest income
of approximately $2,333,000 and $1,087,000 was not recognized for the nine
months ended September 30, 1998 and 1997, respectively.
Cash Available for Distribution
The Company uses cash available for distribution ("CAD") as the primary measure
of its dividend paying ability. The difference between CAD and net income
results from slight variations between generally accepted accounting principles
("GAAP") and cash received. The primary difference between CAD and GAAP is the
amortization of loan origination costs, the costs of the TOP and the excess of
acquired assets over the cost. These amounts have been excluded from CAD due to
their noncash nature. The second difference is the noncash gain and loss
associated with bond impairments and sales for GAAP purposes, which are not
included in the calculation of CAD. During the three and nine months ended
September 30, 1998, there were no FMB impairments or sales. CAD should not be
considered an alternative to net income as a measure of the Company's financial
performance or to cash flow from operating activities (computed in accordance
with GAAP) as a measure of the Company's liquidity, nor is it necessarily
indicative of sufficient cash flow to fund all of the Company's needs.
21
<PAGE>
Cash available for distribution ("CAD") for the three and nine months ended
September 30, 1998 is summarized in the following table:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, 1998 September 30, 1998
------------------ ------------------
<S> <C> <C>
Sources of Cash
Interest income:
Participating first mortgage bonds $ 7,128,239 $ 19,580,311
Temporary investments 57,655 162,049
Promissory notes 148,551 438,981
Less: Amortization (99,406) (298,218)
------------ ------------
Total sources of cash 7,235,039 19,883,123
------------ ------------
Uses of Cash
Operating expenses 1,828,861 3,899,712
Less: Amortization (123,802) (244,792)
------------ ------------
Total uses of cash 1,705,059 3,654,920
------------ ------------
Cash available for distribution $ 5,529,980 $ 16,228,203
Less: distributions to the Manager (382,802) (1,060,174)
------------ ------------
Cash available for distribution to
shareholders $ 5,147,178 $ 15,168,029
============ ============
Distributions to shareholders $ 4,735,203 $ 14,205,522
============ ============
Payout ratio 92.0% 93.7%
============ ============
Cash flows from:
Operating activities $ 5,772,914 $ 16,813,720
============ ============
Investing activities $(43,315,584) $(80,104,093)
============ ============
Financing activities $ 38,201,717 $ 63,049,039
============ ============
</TABLE>
Recently Issued Accounting Standards
In June of 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities". This statement establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities. It is effective for all
fiscal quarters of fiscal years beginning after June 15, 1999. Because the
Company does not currently utilize derivatives or engage in hedging activities,
management does not anticipate that implementation of this statement will have a
material effect on the Company's financial statements.
Year 2000 Compliance
The Company utilizes the computer services of an affiliate of the Manager. The
affiliate of the Manager is in the process of upgrading its computer information
systems to be year 2000 compliant and beyond. The Year 2000 compliance issue
concerns the inability of a computerized
22
<PAGE>
system to accurately record dates after 1999. The affiliate of the Manager
recently underwent a conversion of its financial systems applications and is in
the process of upgrading and testing the in house software and hardware
inventory. The workstations that experienced problems from this process were
corrected with an upgrade patch. The affiliate of the Manager has incurred costs
of approximately $1,000,000 to date and estimates the total costs to be
approximately $2,000,000. These costs are not being charged to the Company. In
regard to third parties, the Manager is in the process of evaluating the
potential adverse impact that could result from the failure of material service
providers and mortgagors to be year 2000 compliant. A detailed survey and
assessment of third party readiness will be sent to material third parties in
the fourth quarter of 1998. The results of the surveys will be compiled in early
1999. No estimate can be made at this time as to the impact of the readiness of
such third parties. The Manager plans to have these issues fully assessed by
early 1999, at which time the risks will be addressed and a contingency plan
will be implemented if necessary.
23
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders - None
Item 5. Other Information -
Stuart J. Boesky ceased to serve as Chief Executive Officer and Alan
P. Hirmes ceased to serve as Chief Financial Officer and Chief Accounting
Officer effective June 18, 1998. Messrs. Boesky and Hirmes remain as Managing
Trustee, President and Chief Operating Officer and Managing Trustee, Executive
Vice President and Secretary, respectively. Effective June 18, 1998, J. Michael
Fried was elected Chief Executive Officer and John B. Roche was elected Chief
Financial Officer and Chief Accounting Officer.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
10(aaan) First Mortgage Bond, dated as of February 2, 1987,
with respect to the Highland Ridge Project in the
principal amount of $15,000,000 (incorporated by
reference to Exhibit 10 (aaan) in the Company's
March 31, 1998 Quarterly Report on Form 10-Q)
10(aaao) First Mortgage Bond, dated as of March 2, 1987,
with respect to the Mortenson I Project in the
principal amount of $6,100,000 (incorporated by
reference to Exhibit 10 (aaao) in the Company's
March 31, 1998 Quarterly Report on Form 10-Q)
10(aaap) First Mortgage Bond, dated as of September 2, 1986,
with respect to the Thomas Lake Place Apartments
Project in the principal amount of $12,975,000
(incorporated by reference to Exhibit 10 (aaap) in
the Company's June 30, 1998 Quarterly Report on
Form 10-Q)
10(aaaq) First Mortgage Bond, dated as of July 31, 1987,
with respect to the Bristol Village Apartments
Project in the principal amount of $17,000,000
(incorporated by reference to Exhibit 10 (aaaq) in
the Company's June 30, 1998 Quarterly Report on
Form 10-Q)
10(aaar) First Mortgage Bond, dated as of April 20, 1998,
with respect to the Ocean Air Apartments Project in
the principal amount of $10,000,000 (incorporated
by reference to Exhibit 10 (aaar) in the Company's
June 30, 1998 Quarterly Report on Form 10-Q)
24
<PAGE>
10(aaas) First Mortgage Bond, dated as of April 28, 1998,
with respect to the Cedarbrook Apartments Project
in the principal amount of $2,840,000 (incorporated
by reference to Exhibit 10 (aaas) in the Company's
June 30, 1998 Quarterly Report on Form 10-Q)
10(aaat) First Mortgage Bond, dated as of April 28, 1998,
with respect to the Phoenix Apartments Project in
the principal amount of $3,250,000 (incorporated by
reference to Exhibit 10 (aaat) in the Company's
June 30, 1998 Quarterly Report on Form 10-Q)
10(aaau) First Mortgage Bond, dated as of April 28, 1998,
with respect to the Stone Creek Project in the
principal amount of $8,820,000 (incorporated by
reference to Exhibit 10 (aaau) in the Company's
June 30, 1998 Quarterly Report on Form 10-Q)
10(aaav) First Mortgage Bond, dated as of May 20, 1998, with
respect to the Lee Hall Project (Marsh Landings) in
the principal amount of $6,050,000 (incorporated by
reference to Exhibit 10 (aaav) in the Company's
June 30, 1998 Quarterly Report on Form 10-Q)
10(aaaw) Contribution Agreement between CharterMac and
CharterMac Origination Trust ("Origination Trust")
dated as of May 21, 1998 (incorporated by reference
to Exhibit 10 (aaaw) in the Company's June 30, 1998
Quarterly Report on Form 10-Q)
10(aaax) Contribution Agreement between Origination Trust
and CharterMac Owner Trust ("Owner Trust") dated as
of May 21, 1998 (incorporated by reference to
Exhibit 10 (aaax) in the Company's June 30, 1998
Quarterly Report on Form 10-Q)
10(aaay) Insurance Agreement among MBIA, CharterMac,
Origination Trust, Owner Trust, CharterMac Floater
Certificate Trust ("Floater Certificate Trust"),
First Tennessee Bank National Association ("First
Tennessee"), Related Charter LP, and Bayerische
Landesbank Girozentrale, New York Branch
("Bayerische") dated as of May 21, 1998
(incorporated by reference to Exhibit 10 (aaay) in
the Company's June 30, 1998 Quarterly Report on
Form 10-Q)
10(aaaz) Liquidity Agreement among Owner Trust, Floater
Certificate Trust, First Tennessee, MBIA and
Bayerische dated as of May 21, 1998 (incorporated
by reference to Exhibit 10 (aaaz) in the Company's
June 30, 1998 Quarterly Report on Form 10-Q)
25
<PAGE>
10(aaaaa) Liquidity Pledge and Security Agreement among
Origination Trust, Owner Trust, Floater Certificate
Trust, MBIA, First Tennessee and Bayerische dated
as of May 21, 1998 (incorporated by reference to
Exhibit 10 (aaaaa) in the Company's June 30, 1998
Quarterly Report on Form 10-Q)
10(aaaab) Fee Agreement among Wilmington Trust Company,
Floater Certificate Trust and CharterMac dated as
of May 21, 1998 (incorporated by reference to
Exhibit 10 (aaaab) in the Company's June 30, 1998
Quarterly Report on Form 10-Q)
10(aaaac) Certificate Placement Agreement (incorporated by
reference to Exhibit 10 (aaaac) in the Company's
June 30, 1998 Quarterly Report on Form 10-Q)
10(aaaad) Remarketing Agreement (incorporated by reference to
Exhibit 10 (aaaad) in the Company's June 30, 1998
Quarterly Report on Form 10-Q)
10(aaaae) First Mortgage Bond, dated as of July 15, 1998,
with respect to the College Park Apartments Project
in the principal amount of $10,100,000 (filed
herewith)
10(aaaaf) First Mortgage Bond, dated as of July 22, 1998,
with respect to Gulfstream Apartments in the
principal amount of $3,500,000 (filed herewith)
10(aaaag) First Mortgage Bond, dated as of August 25, 1998,
with respect to the Lexington Square Project
(Bedford Square) in the principal amount of
$3,850,000 (filed herewith)
10(aaaah) First Mortgage Bond, dated as of August 25, 1998,
with respect to the Northpointe Village Project in
the principal amount of $13,250,000 (filed
herewith)
10(aaaai) First Mortgage Bond, dated as of September 14,
1998, with respect to the Falcon Creek Place
Apartments Project in the principal amount of
$6,144,600 (filed herewith)
10(aaaaj) First Mortgage Bond, dated as of September 15,
1998, with respect to the Jubilee Courtyards
Apartments Project in the principal amount of
$4,150,000 (filed herewith)
10(aaaak) First Mortgage Bond, dated as of September 24,
1998, with respect to the Silvercrest at Clovis
Project in the principal amount of $2,275,000
(filed herewith)
26
<PAGE>
10(aaaal) First Mortgage Bond, dated as of September 24,
1998, with respect to the Carrington Pointe Project
in the principal amount of $3,375,000 (filed
herewith)
27 Financial Data Schedule (filed herewith).
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter.
27
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
Date: November 13, 1998 By: /s/ Stuart J. Boesky
--------------------
Stuart J. Boesky
Managing Trustee, President
and Chief Operating Officer
Date: November 13, 1998 By: /s/ John B. Roche
-----------------
John B. Roche
Chief Financial Officer
and Chief Accounting Officer
R-1 $10,100,000
UNITED STATES OF AMERICA
STATE OF FLORIDA
FLORIDA HOUSING FINANCE CORPORATION
HOUSING REVENUE BONDS
1998 SERIES F
(COLLEGE PARK APARTMENTS PROJECT)
<TABLE>
<CAPTION>
Interest Rate Maturity Date Dated Date
------------- ------------- ----------
<S> <C> <C>
Prior to Conversion Date: 7.00% July 1, 2040 July 15, 1998
After Conversion Date: 7.25%
</TABLE>
REGISTERED OWNER: CHARTER MUNICIPAL MORTGAGE ACCEPTANCE CORPORATION
PRINCIPAL AMOUNT: TEN MILLION, ONE HUNDRED THOUSAND AND NO/100 DOLLARS
The FLORIDA HOUSING FINANCE CORPORATION ("Florida Housing" or the
"Corporation"), a public corporation and a public body corporate and politic
duly created, organized and existing under the laws of the State of Florida (the
"State"), for value received, hereby promises to pay (but only out of the
revenues and other assets hereinafter referred to) to the registered owner
specified above or registered assigns (subject to any right of prior redemption
hereinafter mentioned), on the Maturity Date specified above, the Principal
Amount specified above, and to pay interest thereon, at the rate per annum
specified above, payable monthly on the first Business Day of each month,
commencing August 3, 1998, to the person whose name appears on the registration
books as of the 15th day of the month next preceding any Bond Payment Date (a
"Record Date"). Principal of, and premium, if any, on this Bond are payable in
such coin or currency of the United States as at time of payment is legal tender
for payment of private and public debts, at the designated corporate trust
office of The Bank of New York Trust Company of Florida, N.A., a national
banking association duly organized, existing and authorized under the laws of
the United States of America, with trust powers, as trustee, registrar and
paying agent, in Jacksonville, Florida (the "Trustee," "Registrar" and "Paying
Agent"), or its successor in trust. Interest on this Bond shall be computed on
the basis of a 360-day year comprised of twelve 30-day months. Payment of
principal of premium, if any, and interest on the Bonds shall be made by check
or draft mailed to the address of the person entitled thereto as such address
shall appear on the registration books (hereinafter defined), except in the case
of the Significant Bondholder or the owners of $1,000,000 or more in
<PAGE>
to the Trustee prior to the Record Date preceding any Bond Payment Date. The
Principal Amount hereof shall be paid at maturity or upon redemption upon
presentation and surrender of this Bond.
This Bond represents an issue of duly authorized Florida Housing Finance
Corporation Housing Revenue Bonds, 1998 Series F (College Park Apartments
Project), of Florida Housing, in the aggregate principal amount of $10,100,000
(the "Bonds"), issued under and pursuant to the Constitution and laws of the
State, particularly the Florida Housing Finance Corporation Act, Sections
420.501-420.517, Florida Statutes, as amended (the "Act"). The Bonds are being
issued for the purpose of making a loan (the "Mortgage Loan") pursuant to a loan
agreement (the "Loan Agreement") to College Park Holdings, Ltd., a limited
partnership organized pursuant to the laws of the State of Florida (the
"Developer"), to acquire, construct and equip a multifamily residential
development in Collier County, Florida (the "Project"), This Bond is issued
under and is secured by a Trust Indenture, dated as of July 1, 1998 (the
"Indenture"), between Florida Housing and the Trustee, pursuant to which the
Trustee will act as payee and mortgagee for the Developer's nonrecourse
promissory note in the aggregate principal amount of $10,100,000 (the "Note").
The Note will be secured by a mortgage and security agreement granting a first
lien on the Project in favor of Florida Housing (the "Mortgage"). Reference is
hereby made to the Indenture and to all amendments and supplements thereto for a
description of the property pledged and assigned to the Trustee and of the
provisions, among others, with respect to the nature and extent of the security,
the rights, duties and obligations of Florida Housing and the Trustee, the terms
on which the Bonds are issued and secured, the rights of the owners of the Bonds
and the provisions for defeasance of such rights.
FLORIDA HOUSING HAS NO TAXING POWER. THE BONDS SHALL NOT CONSTITUTE AN
OBLIGATION, EITHER GENERAL OR SPECIAL, OF FLORIDA HOUSING, THE STATE OR ANY
POLITICAL SUBDIVISION THEREOF; AND NEITHER FLORIDA HOUSING, THE STATE, NOR ANY
POLITICAL SUBDIVISION THEREOF SHALL BE LIABLE THEREON. NEITHER THE FAITH,
REVENUES, CREDIT NOR TAXING POWER OF THE STATE OR ANY POLITICAL SUBDIVISION
THEREOF SHALL BE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM IF ANY, OR
INTEREST ON THE BONDS. THE BONDS ARE PAYABLE, AS TO PRINCIPAL, PREMIUM OF, IF
ANY, AND INTEREST, SOLELY OUT OF THE TRUST ESTATE WHICH IS THE SOLE ASSET OF
FLORIDA HOUSING PLEDGED THEREFOR.
The Bonds are secured under the Indenture which assigns to the Trustee
for the benefit of Owners all the right, title and interest of Florida Housing
in and under the Loan Agreement, the Note, the Mortgage, certain funds and
accounts held by the Trustee under the Indenture, payments made pursuant to the
Loan Agreement, leases and rentals of the Project and other funds and moneys
initially or subsequently pledged as part of the trust estate (the "Trust
Estate"), and any deed in lieu of foreclosure delivered pursuant to the
Indenture.
2
<PAGE>
Sinking Fund Redemption
The Bonds are subject to mandatory redemption in part by operation of a
sinking fund. Florida Housing shall redeem on each Bond Payment Date commencing
on first Bond Payment Date following the Conversion Date, as defined in the
Indenture, a principal amount of the Bonds in the amounts determined from the
amortization table attached hereto as Schedule A; provided, however, that the
amortization schedule shall be reduced pro rata across all payments by the
principal amount of any Bonds which (i) had been purchased (other than pursuant
to the provisions of Section 4.09 of the Indenture) or redeemed by the Developer
or the Trustee and canceled by the Trustee prior to the next Bond Payment Date
and (ii) had not previously formed the basis for such reduction.
The redemption price for any such redemption shall be 100% of the
principal amount of the Bonds or portions thereof so redeemed, plus accrued
interest, if any, to the sinking fund payment date, and without premium. The
particular Bonds or portions thereof to be redeemed on each particular sinking
fund payment date shall be selected by the Trustee by lot or as otherwise
instructed in the Indenture, or in the absence thereof, by such other random
means as the Trustee shall determine in its discretion.
Optional Redemption
The Bonds are subject to optional redemption, as follows: (a) one time,
after the Conversion Date, on a date and in a principal amount to be specified
by the Significant Bondholder (as defined in the Indenture) in a written notice
to the Trustee, in part at a redemption price of par plus accrued interest to
the redemption date, and (b) prior to maturity on or after the date occurring 60
months after the Conversion Date, as defined in the Indenture, in whole but not
in part on any date, at the direction of the Developer from amounts prepaid on
the Loan pursuant to the Agreement solely to the extent of any optional
prepayment by the Developer of the Note, or from proceeds of refunding bonds or
otherwise from other sources at the redemption prices (expressed as percentages
of the principal amount) plus accrued interest to the date of redemption, as
follows:
<TABLE>
<CAPTION>
Period in Which Redeemed Redemption Price
<S> <C>
Fifth year following Conversion Date 105%
Sixth year following Conversion Date 104%
Seventh year following Conversion Date 103%
Eighth year following Conversion Date 102%
Ninth year following Conversion Date 101%
Thereafter 100%
</TABLE>
Mandatory Redemption from the Project Fund
The Bonds are subject to mandatory redemption on the first Business Day
following receipt of the Certificate of Completion (as defined in the Indenture)
for which thirty (30) days' notice of
3
<PAGE>
redemption can be given, in whole or in part, from proceeds of the Bonds
remaining on deposit in the Mortgage Loan Account and Capitalized Interest
Account in the Project Fund attributable to moneys not needed to complete the
acquisition, construction and equipping of the Project and pay for all Project
Costs as provided in, and upon the satisfaction of the conditions set forth in,
Section 6.02(a) of the Indenture.
If so called for redemption, the Bonds shall be redeemed at a redemption
price equal to 100% of the principal amount thereof, without premium, plus
accrued interest to the date fixed for redemption.
Extraordinary Mandatory Redemption Upon Damage, Destruction or Condemnation and
Upon Certain Prepayments of the Note and When Sufficient Moneys are Available to
Redeem the Bonds in Whole or in Part
The Bonds are subject to extraordinary mandatory redemption:
(a) In whole or in part, at par, in the event and to the extent
the Note is prepaid after the Project or any portion of it is damaged or
destroyed or is taken in a condemnation proceeding to the extent of net proceeds
of any insurance or condemnation award not used for the repair or restoration of
the Project, as further described below;
(b) In whole, at par, when any amounts in the Bond Fund not being
held therein to redeem Bonds for which notice of redemption has previously been
given, is sufficient to pay any unpaid amounts required to be paid by Article V
of the Indenture and to redeem all Outstanding Bonds.
If so called for redemption in whole, the Bonds shall be redeemed on the
first Business Day for which thirty (30) days' notice of redemption can be given
at a redemption price equal to 100% of the principal amount thereof, without
premium, plus accrued interest to the date fixed for redemption.
If, as a result of fire or other casualty, the Project or any part
thereof is damaged, destroyed or condemned or acquired for public use, the
Developer, with the consent of the Significant Bondholder, which shall not be
unreasonably withheld, delayed or conditioned, is required to repair or restore
the Project in accordance with requirements of the Mortgage and Section 5.04 of
the Agreement. The Trustee, within ten (10) days of receipt of written notice of
such damage, destruction or condemnation, shall provide written notice to the
Developer, Florida Housing, the Significant Bondholder and the Servicer, shall
confirm that the Developer has complied with the provisions of the Mortgage
applicable to such occurrence.
If the conditions for repair or restoration of the Project, as provided
in Section 5.04 of the Agreement are not satisfied, the Trustee at the direction
of the Significant Bondholder, will apply the net proceeds of any insurance or
condemnation to the prepayment of the Note. In such event, the Trustee shall
deposit such net proceeds in the Redemption Fund and apply such moneys to the
redemption of Bonds in accordance with the terms described above.
4
<PAGE>
Mandatory Redemption Resulting from Event of Intervention or Default
The Bonds shall be subject to mandatory redemption in whole at the
direction of the Trustee, pursuant to the exercise of remedies under the Loan
Documents, at the earliest time for which notice hereunder can be given upon the
occurrence of an Event of Intervention as set forth in Section 8.01 of the
Indenture at a redemption price equal to the principal amount of Bonds
Outstanding plus accrued interest due thereon.
Upon the giving of notice of redemption of the Bonds under Section 4.05
of the Indenture, the Bonds shall become payable on the date specified in such
notice of redemption and in the amount specified in the preceding paragraph.
Mandatory Purchase
Any holder of Outstanding Bonds will have the opportunity to present all
or a portion of its Bonds for purchase by the Trustee from moneys provided to
the Trustee by the Developer at any time after the 300th month after the
Conversion Date (the "Mandatory Purchase Date"). In order for the Bonds to be
eligible for purchase, holders of Outstanding Bonds must provide notice to the
Trustee, Florida Housing and the Developer, of their intent to present their
Bonds for mandatory purchase not later than six months prior to the Mandatory
Purchase Date. The Trustee shall notify the Developer within 5 Business Days of
such demand for payment and the amount of Bonds to be presented for purchase on
the Mandatory Tender Date, and pursuant to Section 4.17 of the Loan Agreement,
the Developer shall be required to provide moneys in the amount of the principal
amount so designated by the Trustee plus accrued interest thereon. The Trustee
shall be required to purchase Bonds presented on the Mandatory Purchase Date
only to the extent there are moneys on deposit in the Purchase Fund pursuant to
Section 5.09 of the Indenture for such purpose.
Mandatory Redemption Upon Determination of Taxability.
The Bonds are subject to mandatory redemption in whole at a redemption
price equal to the principal amount of Bonds being redeemed with accrued
interest to the redemption date upon a Determination of Taxability (as defined
in the Indenture) if the Owner of a Bond presents his Bond or Bonds for
redemption, on any date selected by such Owner, specified in a notice in writing
delivered to the Trustee, the Developer and Florida Housing at least ten
Business Days prior to such date.
Selection of Bonds to be Redeemed or Purchased
To the extent that the Bonds are subject to partial redemption
(including but not limited to mandatory sinking fund redemption) and there
exists more than one (1) registered Owner of the Bonds, the Trustee shall redeem
the Bonds in the following manner (unless otherwise directed in writing by the
Significant Bondholder and Florida Housing): the Trustee shall determine the
ratio (expressed as a fraction) that the principal amount of Bonds held by each
Bondholder bears to the
5
<PAGE>
total aggregate principal amount of Bonds Outstanding. The Trustee shall
multiply the amount of money available for the partial redemption by the ratio
as determined above and call for redemption the principal amounts of Bonds so
held by each registered Owner by the respective product determined above. Such
partial redemptions may result in an Owner holding a principal amount of Bonds
in less than an Authorized Denomination or integral multiple of $5,.000. Any
fractional part of one cent shall be ignored (unless otherwise directed in
writing by the Significant Bondholder and Florida Housing) by the Trustee.
Except as otherwise provided in the Indenture, notice of redemption is
required to be given by first class mail, postage prepaid, not less than thirty
(30) nor more than forty-five (45) days prior to the redemption date to the
registered owners hereof to be redeemed at the address of such registered owners
as shown on the bond register. Receipt of such notice of redemption shall not be
a condition precedent to such redemption and failure so to notify the registered
owner shall not affect the validity of the proceedings for the redemption of
this Bond. Such notice shall be given in the name of Florida Housing, shall be
dated, shall set forth the principal amount of the Bonds Outstanding which shall
be called for redemption and shall specify the redemption date and the
redemption price. If less than all of the Bonds shall be called for redemption,
the notice shall set forth the Bonds Outstanding to be redeemed and the portion
of the principal amount thereof to be redeemed. Such notice shall further state
that on the redemption date the Bonds will be payable at the Payment Office of
the Trustee or Paying Agent or as otherwise provided in the Indenture and from
such date interest shall cease to accrue.
Notice of redemption having been given as provided in the preceding
paragraph and all conditions precedent, if any, specified in such notice having
been satisfied, the Bonds or the portion thereof so to be redeemed shall become
due and payable on the date fixed for redemption at the redemption price
specified therein plus any accrued interest to the redemption date, and upon
presentation and surrender thereof at the place specified in such notice or as
otherwise provided in the Indenture. On and after the redemption date (unless
Florida Housing shall default in the payment of the redemption price and accrued
interest payable on the redemption date), (i) such Bonds (or portion thereof)
shall cease to bear interest and (ii) such Bonds (or portion thereof) shall no
longer be considered as Outstanding under the Indenture.
The registered owner of this Bond shall have no right to enforce the
provisions of the Indenture or to institute action to enforce the covenants
therein, or to take any action with respect to any event of default thereunder,
or to institute, appear in or defend any suit or other proceeding with respect
thereto, except as provided in the Indenture.
Modifications or alterations of the Indenture or of any indenture
supplemental thereto may be made only to the extent and in the circumstances
permitted by the Indenture.
This Bond may be exchanged, and its transfer may be effected, only by
the registered owner hereof in person or by his attorney duly authorized in
writing at the designated corporate trust office of the Trustee, but only in the
manner, subject to the limitations and upon payment of the charges provided in
the Indenture, and upon surrender and cancellation of this Bond. Upon exchange
or registration of such transfer a new registered bond or Bonds of the same
series, maturity and interest
6
<PAGE>
rate and of Authorized Denomination denominations for the same aggregate
principal amount will be issued in exchange therefor.
Florida Housing and the Trustee shall deem and treat the person in whose
name this Bond shall be registered on the bond register, as the absolute owner
hereof for the purpose of receiving payment of or on account of principal hereof
and interest due hereon and for all other purposes and neither Florida Housing
nor the Trustee shall be affected by any notice to the contrary.
All acts, conditions and things required by the Constitution and the
laws of the State to exist, happen and be performed precedent to and in the
execution and delivery of the Indenture (hereinafter defined) and the issuance
of this Bond do exist, have happened and have been performed in due time, form
and manner as required by law.
No covenant or agreement contained in this Bond or the Indenture shall
be deemed to be a covenant or agreement of any official, officer, agent or
employee of Florida Housing in his or her individual capacity, and neither the
members of Florida Housing, nor any official executing this Bond, shall be
liable personally on this Bond or be subject to any personal liability or
accountability by reason of the issuance or sale of this Bond.
This Bond shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose until the Registrar shall have executed the
Certificate of Authentication appearing hereon.
IN WITNESS WHEREOF, Florida Housing has caused this Bond to be executed
in its name by the manual or facsimile signature of its Chairman or Vice
Chairman and the facsimile of its seal to be hereunto affixed, impressed,
imprinted or reproduced hereon and attested by the manual or facsimile signature
of its Secretary all as of July 15, 1998.
FLORIDA HOUSING FINANCE CORPORATION
[SEAL]
[SEAL OF THE FLORIDA HOUSING FINANCE AGENCY]
ATTEST: By: /s/ Clark D. Bennett
Chairman
/s/ Susan J. Leigh
Secretary
7
<PAGE>
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the within-mentioned Indenture.
Date of Authentication: THE BANK OF NEW YORK TRUST
COMPANY OF FLORIDA, N.A.,
as Registrar
By: /s/ Paula R. Williams
Authorized Signatory
CERTIFICATE OF VALIDATION
This Bond is one of a series of Bonds which were validated by Judgment of the
Circuit Court of the Second Judicial Circuit in and for Leon County, Florida,
rendered on November 12, 1997.
/s/ Clark D. Bennett
Clark D. Bennett, Chairman of the Florida
Housing Finance Corporation
8
<PAGE>
[Form of Assignment for Transfer]
FOR VALUE RECEIVED, the undersigned,
hereby sells, assigns and transfers unto __________________________________ (Tax
Identification or Social Security No. ____________) the within bond and all
rights thereunder, and hereby irrevocably constitutes and appoints
______________________________ attorney to transfer the within bond on the books
kept for registration thereof, with full power or substitution in the premises.
Date: ____________________________ Signature
Signature Guaranteed:
<TABLE>
<CAPTION>
<S> <C>
NOTICE: Signature(s) must be Guaranteed by a NOTICE: The signature to this assignment must
signature guarantor institution that is a correspond with the name of the registered owner of
participant in a nationally recognized signature the within bond as it appears on the face hereof in
guarantor program. every particular, without alteration or enlargement
or any change whatever, and the Social Security number
or federal employer identification must be supplied.
</TABLE>
9
<PAGE>
SCHEDULE A
Sinking Fund Payment Schedule0
10
<PAGE>
College Park
Apartments
Mandatory Sinking Fund
Schedule
<TABLE>
<CAPTION>
Date Principal Date Principal
Amount Amount
<S> <C> <C> <C>
1-Aug-00 3,586 1-Nov-04 4,876
1-Sep-00 3,608 1-Dec-04 4,905
1-Oct-00 3,629 1-Jan-05 4,935
1-Nov-00 3,651 1-Feb-05 4,965
1-Dec-00 3,673 1-Mar-05 4,995
1-Jan-01 3,696 1-Apr-05 5,025
1-Feb-01 3,718 1-May-05 5,055
1-Mar-01 3,740 1-Jun-05 5,086
1-Apr-01 3,763 1-Jul-05 5,116
1-May-01 3,786 1-Aug-05 5,147
1-Jun-01 3,809 1-Sep-05 5,178
1-Jul-01 3,832 1-Oct-05 5,210
1-Aug-01 3,855 1-Nov-05 5,241
1-Sep-01 3,878 1-Dec-05 5,273
1-Oct-01 3,902 1-Jan-06 5,305
1-Nov-01 3,925 1-Feb-06 5,337
1-Dec-01 3,949 1-Mar-06 5,369
1-Jan-02 3,973 1-Apr-06 5,401
1-Feb-02 3,997 1-May-06 5,434
1-Mar-02 4,021 1-Jun-06 5,467
1-Apr-02 4,045 1-Jul-06 5,500
1-May-02 4,070 1-Aug-06 5,533
1-Jun-02 4,094 1-Sep-06 5,566
1-Jul-02 4,119 1-Oct-06 5,600
1-Aug-02 4,144 1-Nov-06 5,634
1-Sep-02 4,169 1-Dec-06 5,868
1-Oct-02 4,194 1-Jan-07 5,702
1-Nov-02 4,219 1-Feb-07 5,737
1-Dec-O2 4,245 1-Mar-07 5,771
1-Jan-03 4,270 1-Apr-07 5,806
1-Feb-03 4,296 1-May-07 5,841
1-Mar-03 4,322 1-Jun-07 5,877
1-Apr-03 4,348 1-Jul-07 5,912
1-May-03 4,375 1-Aug-07 5,948
1-Jun-03 4,401 1-Sep-07 5,984
1-Jul-03 4,428 1-Oct-07 6,020
1-Aug-03 4,454 1-Nov-07 6,056
1-Sep-03 4,481 1-Dec-07 6,093
1-Oct-03 4,508 1-Jan-08 6,130
1-Nov-03 4,536 1-Feb-08 6,167
1-Dec-03 4,563 1-Mar-08 6,204
1-Jan-04 4,591 1-Apr-08 6,241
1-Feb-04 4,618 1-May-08 6,279
1-Mar-04 4,646 1-Jun-08 6,317
1 Apr-04 4,674 1-Jul-08 6,355
1-May-04 4,703 1-Aug-08 6,394
1-Jun-04 4,731 1-Sep-08 6,432
1-Jul-04 4,760 1-Oct-08 6,471
1-Aug-04 4,788 1-Nov-08 6,510
1-Sep-04 4,817 1-Dec-08 6,550
1-Oct-04 4,846 1-Jan-09 6,589
</TABLE>
<PAGE>
College Park Apartments
Mandatory Sinking Fund
Schedule
<TABLE>
<CAPTION>
Date Principal Date Principal
Amount Amount
<S> <C> <C> <C>
1-Feb-09 6,629 1-May-13 9,013
1-Mar-09 6,669 1-Jun-13 9,067
1-Apr-09 6,709 1-Jul-13 9,122
1-May-09 6,750 1-Aug-13 9,177
1-Jun-09 6,791 1-Sep-13 9,233
1-Jul-09 6,832 1-Oct-13 9,288
1-Aug-09 6,873 1-Nov-13 9,344
1-Sep-09 6,914 1-Dec-13 9,401
1-Oct-09 6,956 1-Jan-14 9,458
1-Nov-09 6,998 1-Feb-14 9,515
1-Dec-09 7,040 1-Mar-14 9,572
1-Jan-10 7,083 1-Apr-14 9,630
1-Feb-10 7,126 1-May-14 9,688
1-Mar-10 7,169 1-Jun-14 9,747
1-Apr-10 7,212 1-Jul-14 9,806
1-May-10 7,256 1-Aug-14 9,865
1-Jun-10 7,300 1-Sep-14 9,925
1-Jul-10 7,344 1-Oct-14 9,985
1-Aug-10 7,388 1-Nov-14 10,045
1-Sep-10 7,433 1-Dec-14 10,106
1-Oct-10 7,478 1-Jan-15 10,167
1-Nov-10 7,523 1-Feb-15 10,228
1-Dec-10 7,588 1-Mar-15 10,290
1-Jan-11 7,614 1-Apr-15 10,352
1-Feb-11 7,660 1-May-15 10,415
1-Mar-11 7,706 1-Jun-15 10,477
1-Apr-11 7,753 1-Jul-15 10,541
1-May-11 7,800 1-Aug-15 10,604
1-Jun-11 7,847 1-Sep-13 10,669
1-Jul-11 7,894 1-Oct-15 10,733
1-Aug-11 7,942 1-Nov-15 10,798
1-Sep-11 7,990 1-Dec-15 10,863
1-Oct-11 8,038 1-Jan-16 10,929
1-Nov-11 8,087 1-Feb-16 10,995
1-Dec-11 8,136 1-Mar-16 11,061
1-Jan-12 8,185 1-Apr-16 11,128
1-Feb-12 8,234 1-May-16 11,195
1-Mar-12 8,284 1-Jun-16 11,263
1-Apr-12 8,334 1-Jul-16 11,331
1-May-12 8,384 1-Aug-16 11,399
1-Jun-12 8,435 1-Sep-16 11,468
1-Jul-12 8,486 1-Oct-16 11,538
1-Aug-12 8,537 1-Nov-16 11,607
1-Sep-12 8,589 1-Dec-16 11,677
1-Oct-12 8,641 1-Jan-17 11,748
1-Nov-12 8,693 1-Feb-17 11,819
1-Dec-12 8,745 1-Mar-17 11,890
1-Jan-13 8,798 1-Apr-17 11,962
1-Feb-13 8,851 1-May-17 12,034
1-Mar-13 8,905 1-Jun-17 12,107
1-Apr-13 8,959 1-Jul-17 12,180
</TABLE>
<PAGE>
College Park
Apartments
Mandatory Sinking Fund
Schedule
<TABLE>
<CAPTION>
Date Principal Date Principal
Amount Amount
<S> <C> <C> <C>
1-Aug-17 12,254 1-Nov-21 16,660
1-Sep-17 12,328 1-Dec-21 16,761
1-Oct-17 12,402 1-Jan-22 16,862
1-Nov-17 12,477 1-Feb-22 16,964
1-Dec-17 12,553 1-Mar-22 17,067
1-Jan-18 12,628 1-Apr-22 17,170
1-Feb-18 12,705 1-May-22 17,274
1-Mar-18 12,782 1-Jun-22 17,378
1-Apr-18 12,859 1-Jul-22 17,483
1-May-18 12,936 1-Aug-22 17,589
1-Jun-18 13,015 1-Sep-22 17,695
1-Jul-18 13,093 1-Oct-22 17,802
1-Aug-18 13,172 1-Nov-22 17,909
1-Sep-18 13,252 1-Dec-22 18,017
1-Oct-18 13,332 1-Jan-23 18,126
1-Nov-18 13,413 1-Feb-23 18,236
1-Dec-18 13,494 1-Mar-23 18,346
1-Jan-19 13,575 1-Apr-23 18,457
1-Feb-19 13,657 1-May-23 18,568
1-Mar-19 13,740 1-Jun-23 18,681
1-Apr-19 13,823 1-Jul-23 18,793
1-May-19 13,906 1-Aug-23 18,907
1-Jun-19 13,990 1-Sep-23 19,021
1-Jul-19 14,075 1-Oct-23 19,136
1-Aug-19 14,160 1-Nov-23 19,252
1-Sep-19 14,245 1-Dec-23 19,368
1-Oct-19 14,331 1-Jan-24 19,485
1-Nov-19 14,418 1-Feb-24 19,603
1-Dec-19 14,505 1-Mar-24 19,721
1-Jan-20 14,593 1-Apr-24 19,840
1-Feb-20 14,681 1-May-24 19,960
1-Mar-20 14,770 1-Jun-24 20,081
1-Apr-20 14,859 1-Jul-24 20,202
1-May-20 14,949 1-Aug-24 20,324
1-Jun-20 15,039 1-Sep-24 20,447
1-Jul-20 15,130 1-Oct-24 20,670
1-Aug-20 16,221 1-Nov-24 20,695
1-Sep-20 15,313 1-Dec-24 20,820
1-Oct-20 15,406 1-Jan-25 20,946
1-Nov-20 15,499 1-Feb-25 21,072
1-Dec-20 15,592 1-Mar-25 21,199
1-Jan-21 15,687 1-Apr-25 21,328
1-Feb-21 15,781 1-May-25 21,456
1-Mar-21 15,877 1-Jun-25 21,586
1-Apr-21 15,973 1-Jul-25 21,716
1-May-21 16,069 1-Aug-25 21,848
1-Jun-21 16,166 1-Sep-25 21,980
1-Jul-21 16,264 1-Oct-25 22,112
1-Aug-21 16,362 1-Nov-25 22,246
1-Sep-21 16,461 1-Dec-25 22,380
1-Oct-21 16,560 1-Jan-26 22,516
</TABLE>
<PAGE>
College Park
Apartments
Mandatory Sinking Fund
Schedule
<TABLE>
<CAPTION>
Date Principal Date Principal
Amount Amount
<S> <C> <C> <C>
1-Feb-26 22,652 1-May-30 30,797
1-Mar-26 22,789 1-Jun-30 30,984
1-Apr-26 22,926 1-Jul-30 31,171
1-May-26 23,065 1-Aug-30 31,359
1-Jun-26 23,204 1-Sep-30 31,548
1-Jul-26 23,344 1-Oct-30 31,739
1-Aug-26 23,485 1-Nov-30 31,931
1-Sep-26 23,627 1-Dec-30 32,124
1-Oct-26 23,770 1-Jan-31 32,318
1-Nov-26 23,914 1-Feb-31 32,513
1-Dec-26 24,058 1-Mar-31 32,710
1-Jan-27 24,203 1-Apr-31 32,907
1-Feb-27 24,350 1-May-31 33,106
1-Mar-27 24,497 1-Jun-31 33,306
1-Apr-27 24,645 1-Jul-31 33,507
1-May-27 24,794 1-Aug-31 33,710
1-Jun-27 24,943 1-Sep-31 33,913
1-Jul-27 25,094 1-Oct-31 34,118
1-Aug-27 25,246 1-Nov-31 34,324
1-Sep-27 25,398 1-Dec-31 34,532
1-Oct-27 25,552 1-Jan-32 34,740
1-Nov-27 25,706 1-Feb-32 34,950
1-Dec-27 25,861 1-Mar-32 35,161
1-Jan-28 26,018 1-Apr-32 35,374
1-Feb-28 26,175 1-May-32 35,588
1-Mar-28 26,333 1-Jun-32 35,803
1-Apr-28 26,492 1-Jul-32 36,019
1-May-28 26,652 1-Aug-32 30,236
1-Jun-28 26,813 1-Sep-32 36,456
1-Jul-28 26,976 1-Oct-32 36,676
1-Aug-28 27,138 1-Nov-32 36,897
1-Sep-28 27,302 1-Dec-32 37,120
1-Oct-28 27,467 1-Jan-33 37,344
1-Nov-28 27,633 1-Feb-33 37,570
1-Dec-28 27,800 1-Mar-33 37,797
1-Jan-29 27,968 1-Apr-33 38,025
1-Feb-29 28,137 1-May-33 38,255
1-Mar-29 28,307 1-Jun-33 38,486
1-Apr-29 28,478 1-Jul-33 38,719
1-May-29 28,650 1-Aug-33 38,953
1-Jun-29 28,823 1-Sep-33 39,188
1-Jul-29 28,997 1-Oct-33 39,425
1-Aug-29 29,172 1-Nov-33 39,663
1-Sep-29 29,349 1-Dec-33 39,903
1-Oct-29 29,526 1-Jan-34 40,144
1-Nov-29 29,704 1-Feb-34 40,386
1-Dec-29 29,884 1-Mar-34 40,630
1-Jan-30 30,064 1-Apr-34 40,876
1-Feb-30 30,246 1-May-34 41,123
1-Mar-30 30,429 1-Jun-34 41,371
1-Apr-30 30,612 1-Jul-34 41,621
</TABLE>
<PAGE>
College Park
Apartments
Mandatory Sinking Fund
Schedule
<TABLE>
<CAPTION>
Date Principal Date Principal
Amount Amount
<S> <C> <C> <C>
1-Aug-34 41,873 1-Nov-38 56,930
1-Sep-34 42,125 1-Dec-38 57,274
1-Oct-34 42,380 1-Jan-39 57,620
1-Nov-34 42,636 1-Feb-39 57,968
1-Dec-34 42,894 1-Mar-39 58,319
1-Jan-35 43,153 1-Apr-39 58,671
1-Feb-35 43,413 1-May-39 59,025
1-Mar-35 43,676 1-Jun-39 59,382
1-Apr-35 43,940 1-Jul-39 59,741
1-May-35 44,205 1-Aug-39 60,102
1-Jun-35 44,472 1-Sep-39 60,465
1-Jul-35 44,741 1-Oct-39 60,830
1-Aug-35 45,011 1-Nov-39 61,198
1-Sep-35 45,283 1-Dec-39 61,567
1-Oct-35 45,557 1-Jan-40 61,939
1-Nov-35 45,832 1-Feb-40 62,314
1-Dec-35 46,109 1-Mar-40 62,690
1-Jan-36 46,387 1-Apr-40 63,069
1-Feb-36 46,668 1-May-40 63,450
1-Mar-36 44,960 1-Jun-40 63,833
1-Apr-36 47,233 1-Jul-40 64,219
1-May-36 47,519
1-Jun-36 47,806
1-Jul-36 48,095
1-Aug-36 48,385
1-Sep-36 48,677
1-Oct-36 48,972
1-Nov-36 49,267
1-Dec-36 49,565
1-Jan-37 49,865
1-Feb-37 50,166
1-Mar-37 50,469
1-Apr-37 50,774
1-May-37 51,081
1-Jun-37 51,389
1-Jul-37 51,700
1-Aug-37 52,012
1-Sep-37 52,326
1-Oct-37 52,642
1-Nov-37 52,960
1-Dec-37 53,280
1-Jan-38 53,602
1-Feb-38 53,926
1-Mar-38 54,252
1-Apr-38 54,580
1-May-38 54,910
1-Jun-38 55,241
1-Jul-38 55,575
1-Aug-38 55,911
1-Sep-38 56,249
1-Oct-38 56,588
</TABLE>
R-1 $3,500,000
UNITED STATES OF AMERICA
STATE OF FLORIDA
FLORIDA HOUSING FINANCE CORPORATION
HOUSING REVENUE BONDS
1998 SERIES H
(GULFSTREAM APARTMENTS)
<TABLE>
<CAPTION>
Interest Rate Maturity Date Dated Date
- ------------- ------------- ----------
<S> <C> <C>
7.25% July 1, 2038 July 22, 1998
</TABLE>
REGISTERED OWNER: CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
PRINCIPAL AMOUNT: THREE MILLION FIVE HUNDRED THOUSAND DOLLARS.
The FLORIDA HOUSING FINANCE CORPORATION ("Florida Housing" or the
"Corporation"), a public corporation and a public body corporate and politic
duly created, organized and existing under the laws of the State of Florida (the
"State"), for value received, hereby promises to pay (but only out of the
revenues and other assets hereinafter referred to) to the registered owner
specified above or registered assigns (subject to any right of prior redemption
hereinafter mentioned), on the Maturity Date specified above, the Principal
Amount specified above, and to pay interest thereon, at the rate per annum
specified above, payable monthly commencing on September 1, 1998 to the person
whose name appears on the registration books as of the 15th day of the month
next preceding any Bond Payment Date (a "Record Date"). Principal of, and
premium, if any, on this Bond are payable in such coin or currency of the United
States as at time of payment is legal tender for payment of private and public
debts, at the designated corporate trust office of First Union National Bank, a
national banking association duly organized, existing and authorized under the
laws of the United States of America, with trust powers, as trustee, registrar
and paying agent, in Jacksonville, Florida (the "Trustee," "Registrar" and
"Paying Agent"), or its successor in trust. Interest on this Bond shall be
computed on the basis of a 360-day year comprised of twelve 30-day months.
Payment of interest shall be made by check or draft mailed to the address of the
person entitled thereto as such address shall appear on the registration books
(hereinafter defined), except in the case of owners of $1,000,000 or more in
aggregate principal amount of bonds which may be payable by wire transfer upon
written instruction to the Trustee prior to the Record Date preceding any Bond
Payment Date. The Principal Amount hereof shall be paid at maturity or upon
redemption upon presentation and surrender of this Bond.
This Bond represents an issue of duly authorized Florida Housing Finance
Corporation Housing Revenue Bonds, 1998 Series H (Gulfstream Apartments), of
Florida Housing, in the aggregate principal amount of $3,500,000 (the "Bonds"),
issued under and pursuant to the
<PAGE>
Constitution and laws of the State, particularly the Florida Housing Finance
Corporation Act, Sections 420.501-420.516, Florida Statutes, as amended (the
"Act"). The Bonds are being issued for the purpose of making a loan (the
"Mortgage Loan") pursuant to a loan agreement (the "Loan Agreement") to RHF
Gulfstream Associates, Ltd., a limited partnership organized pursuant to the
laws of the State of Florida (the "Developer"), to acquire and substantially
rehabilitate a multifamily residential development in Broward County, Florida
(the "Project"). This Bond is issued under and is secured by a Trust Indenture,
dated as of July 1, 1998 (the "Indenture"), between Florida Housing and the
Trustee, pursuant to which the Trustee will act as payee and mortgagee for the
Developer's nonrecourse promissory note in the aggregate principal amount of
$3,500,000 (the "Note"). The Note will be secured by a mortgage and security
agreement granting a second lien on the Project in favor of Florida Housing (the
"Mortgage"). Reference is hereby made to the Indenture and to all amendments and
supplements thereto for a description of the property pledged and assigned to
the Trustee and of the provisions, among others, with respect to the nature and
extent of the security, the rights, duties and obligations of Florida Housing
and the Trustee, the terms on which the Bonds are issued and secured, the rights
of the owners of the Bonds and the provisions for defeasance of such rights.
FLORIDA HOUSING HAS NO TAXING POWER. THE BONDS SHALL NOT CONSTITUTE AN
OBLIGATION, EITHER GENERAL OR SPECIAL, OF FLORIDA HOUSING, THE STATE OR ANY
POLITICAL SUBDIVISION THEREOF; AND NEITHER FLORIDA HOUSING, THE STATE, NOR ANY
POLITICAL SUBDIVISION THEREOF SHALL BE LIABLE THEREON. NEITHER THE FAITH,
REVENUES, CREDIT NOR TAXING POWER OF THE STATE OR ANY POLITICAL SUBDIVISION
THEREOF SHALL BE PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM IF ANY, OR
INTEREST ON THE BONDS. THE BONDS ARE PAYABLE, AS TO PRINCIPAL, PREMIUM OF ANY,
AND INTEREST, SOLELY OUT OF THE TRUST ESTATE WHICH IS THE SOLE ASSET OF FLORIDA
HOUSING PLEDGED THEREFOR.
The Bonds are secured under the Indenture which assigns to the Trustee
for the benefit of Owners all the right, title and interest of Florida Housing
in and under the Loan Agreement, the Note, the Mortgage, certain funds and
accounts held by the Trustee under the Indenture, payments made pursuant to the
Loan Agreement, leases and rentals of the Project and other funds and moneys
initially or subsequently pledged as part of the trust estate (the "Trust
Estate"), and any deed in lieu of foreclosure delivered pursuant to the
Indenture.
Sinking Fund Redemption
(a) The Bonds are subject to mandatory redemption in part by operation
of a sinking fund. Florida Housing shall redeem on the applicable sinking fund
payment date a principal amount of the Bonds in the amounts determined from the
table attached as Exhibit B to the Indenture; provided, however, that the
principal amount of the Bonds to be redeemed on any particular sinking fund
payment date shall be reduced (i) by the principal amount of any Bonds of the
applicable maturity (treating each sinking fund payment as a separate maturity
for such purposes) which (A) had been
2
<PAGE>
purchased (other than pursuant to the provisions of Section 4.10 of the
Indenture) or redeemed by the Developer or the Trustee and canceled by the
Trustee at least sixty (60) days prior to such sinking fund payment date and (B)
had not previously formed the basis for such reduction and (ii) pro rata by each
maturity (treating each sinking fund payment as a separate maturity for such
purposes) to the extent of each redemption pursuant to Section 4.01(b) of the
Indenture.
(b) The Bonds are subject to further redemption in part by operation of
a sinking fund from and to the extent of Available Cash Flow up to an amount
equal to $30,000 in each calender year which amount shall accumulate if and to
the extent not paid in any calender year, payable semiannually on each May and
November 1 beginning November 1, 2000.
(c) The redemption price for any such redemption shall be 100% of the
principal amount of the Bonds or portions thereof so redeemed, plus accrued
interest, if any, to the sinking fund payment date, and without premium. Upon a
redemption pursuant to Section 4.01(b) of the Indenture each monthly sinking
fund redemption pursuant to Section 4.01(a) shall be reduced pro rata.
Optional Redemption
The Bonds are subject to optional redemption, prior to maturity on or
after April 1, 2005, in whole on any date, but not in part, at the direction of
the Developer from amounts prepaid on the Loan pursuant to the Agreement solely
to the extent of any optional prepayment by the Developer of the Note, the
particular Bonds to be designated by the Developer, or from proceeds of
refunding bonds or otherwise from other sources at the redemption prices
(expressed as percentages of the principal amount) plus accrued interest to the
date of redemption, as follows:
<TABLE>
<CAPTION>
Redemption Dates Redemption Price
---------------- ----------------
<S> <C>
April 1, 2005 through March 31, 2006 105%
April 1, 2006 through March 31, 2007 104
April 1, 2007 through March 31, 2008 103
April 1, 2008 through March 31, 2009 102
April 1, 2009 through March 31, 2010 101
April 1, 2010 and thereafter 100
</TABLE>
Mandatory Redemption from the Project Fund and the Debt Service Reserve Fund
The Bonds are subject to mandatory redemption on the first Business Day
following payment in full to the Construction Lender of the amount owing under
the Construction Loan Documents for which thirty (30) days' notice of redemption
can be given, in whole or in part, from proceeds of the Bonds remaining in the
Project Fund attributable to moneys not needed to complete the
3
<PAGE>
substantial rehabilitation of the Project and pay for all Project Costs as
provided in, and upon the satisfaction of the conditions set forth in, Section
6.02(a) of the Indenture.
If so called for redemption, the Bonds shall be redeemed at a redemption
price equal to 100% of the principal amount thereof, without premium, plus
accrued interest to the date fixed for redemption.
Extraordinary Mandatory Redemption Upon Damage, Destruction or Condemnation
The Bonds are subject to extraordinary mandatory redemption in whole or in part,
in the event and to the extent the Note is prepaid after the Project or any
portion of it is damaged or destroyed or is taken in a condemnation proceeding
to the extent of any Insurance Proceeds or Condemnation Award not used for the
repair or restoration of the Project, as further described below.
If so called for redemption, the Bonds shall be redeemed on the first
Business Day for which thirty (30) days notice of redemption can be given at a
redemption price equal to 100% of the principal amount thereof, without premium,
plus accrued interest to the date fixed for redemption.
If, as a result of fire or other casualty, the Project or any part
thereof is damaged, destroyed or condemned or acquired for public use, the
Developer with the consent of the Significant Bondholder may elect to repair or
restore the Project in accordance with requirements of the Mortgage and Section
6.04 of the Agreement. The Trustee, within ten (10) days of receipt of written
notice of such damage, destruction or condemnation, shall provide written notice
to the Developer, Florida Housing, the Significant Bondholder and the Servicer
and the Servicer shall confirm that the Developer has complied with the
provisions of the Mortgage applicable to such occurrence.
If the conditions for repair or restoration of the Project, as provided
in Mortgage and Section 6.04 of the Agreement are not satisfied or if the
Significant Bondholder has not consented to such repairs or restorations, the
Trustee will apply the net proceeds of any insurance or condemnation to the
reduction of indebtedness under the Note. In such event, the Trustee shall
deposit such net proceeds in the Redemption Fund and apply such moneys to the
redemption of Bonds in accordance with the terms described above.
Determination of Taxability
The Bonds shall be subject to mandatory redemption, and shall be redeemed, prior
to maturity at a redemption price equal to par plus accrued interest to the date
of redemption upon a Determination of Taxability if the Owner of a Bond presents
its Bond or Bonds for redemption, on any date selected by such Owner, specified
in a notice in writing delivered to the Developer, the Trustee and Florida
Housing at least five (5) Business Days prior to such date.
4
<PAGE>
Mandatory Redemption Resulting From Event of Intervention or Default
The Bonds shall be subject to mandatory redemption in whole at the
direction of the Trustee with the consent of the Significant Bondholder,
pursuant to the exercise of remedies under the Loan Documents, at the earliest
time for which notice hereunder can be given upon the occurrence of an Event of
Intervention as set forth in Section 8.01 of the Indenture at a redemption price
equal to the lesser of the amount of Bonds Outstanding plus the accrued interest
due thereon or the amount of the Trust Estate or proceeds of sale, to be
distributed in accordance with Section 8.04 of the Indenture, from a
distribution of the Trust Estate as a result of the realization by the Trustee
of its rights and remedies hereunder with respect to the Trust Estate.
Upon the giving of notice of redemption of the Bonds pursuant to Section
4.06 of the Indenture, the Bonds shall become payable on the date specified in
such notice of redemption and in the amount specified in the preceding
paragraph, provided the actual payment in redemption shall be due and actually
payable only at such time and to the extent funds are available therefor to the
Trustee, and upon either payment in full of the principal amount of Bonds
Outstanding plus the accrued interest due thereon or full distribution of either
the Trust Estate or the proceeds of the sale of the Project, in accordance with
Section 8.04 of the Indenture, such payment or distribution shall be in full
satisfaction of the amount of principal and interest due on the Bonds.
Mandatory Purchase
Any holder of Outstanding Bonds will have the opportunity to present all
or a portion of its Bonds for purchase by the Trustee from moneys provided to
the Trustee by the Developer on any Business Day after the 192nd month after
April 1, 2000 upon six (6) months written notice to the Developer and the
Trustee (the "Mandatory Purchase Date"). In order for the Bonds to be eligible
for purchase, holders of Outstanding Bonds must provide notice to the Trustee of
their intent to present their Bonds for mandatory purchase not sooner than 12
months prior to the Mandatory Purchase Date and not later than 6 months prior to
the Mandatory Purchase Date. The Trustee shall notify the Developer within 5
Business Days of such demand for payment and the amount of Bonds to be presented
for purchase on the Mandatory Tender Date, and pursuant to Section 5.02(c) of
the Agreement, the Developer shall be required to provide Available Moneys in
the amount of the principal amount so designated by the Trustee plus accrued
interest thereon. The Trustee shall only be required to purchase Bonds presented
on the Mandatory Purchase Date to the extent there are Available Moneys on
deposit in the Redemption Fund pursuant to Section 5.07 of the Indenture, for
such purpose.
Selection of Bonds to be Redeemed
If less than all the Bonds are to be redeemed, the particular Bonds or
portions of Bonds to be redeemed shall be selected by the Trustee, on a pro rata
basis based as nearly as practicable on the Outstanding principal amount of
Bonds of each maturity (treating each sinking fund payment
5
<PAGE>
as a separate maturity for such purposes) and the Bonds of each such maturity
will be selected by lot in such manner as the Trustee in its discretion may deem
fair and appropriate.
In making such selection by lot, the Trustee may treat each Bond to be
redeemed as representing that number of Bonds of the lowest Authorized
Denominations as is obtained by dividing the principal amount of such Bond by
such denomination.
Except as otherwise provided in the Indenture, notice of redemption is
required to be given by first class mail, postage prepaid, not less than thirty
(30) nor more than forty-five (45) days prior to the redemption date to the
registered owners hereof to be redeemed at the address of such registered owners
as shown on the bond register. Receipt of such notice of redemption shall not be
a condition precedent to such redemption and failure so to notify the registered
owner shall not affect the validity of the proceedings for the redemption of
this Bond. Such notice shall be given in the name of Florida Housing, shall be
dated, shall set forth the principal amount of the Bonds Outstanding which shall
be called for redemption and shall specify the redemption date and the
redemption price. If less than all of the Bonds shall be called for redemption,
the notice shall set forth the Bonds Outstanding to be redeemed and the portion
of the principal amount thereof to be redeemed. Such notice shall further state
that on the redemption date the Bonds will be payable at the designated
corporate trust office of the Trustee or Paying Agent and from such date
interest shall cease to accrue.
Notice of redemption having been given as provided in the preceding
paragraph and all conditions precedent, if any, specified in such notice having
been satisfied, the Bonds or the portion thereof so to be redeemed shall become
due and payable on the date fixed for redemption at the redemption price
specified therein plus any accrued interest to the redemption date, and upon
presentation and surrender thereof at the place specified in such notice. On and
after the redemption date (unless Florida Housing shall default in the payment
of the redemption price and accrued interest payable on the redemption date or
unless the Bonds shall be purchased in lieu of the redemption pursuant to
Section 4.09 of the Indenture), (i) such Bonds (or portion thereof shall cease
to bear interest and (ii) such Bonds (or portion thereof shall no longer be
considered as Outstanding under the Indenture.
The registered owner of this Bond shall have no right to enforce the
provisions of the Indenture or to institute action to enforce the covenants
therein, or to take any action with respect to any event of default thereunder,
or to institute, appear in or defend any suit or other proceeding with respect
thereto, except as provided in the Indenture.
Modifications or alterations of the Indenture or of any indenture
supplemental thereto may be made only to the extent and in the circumstances
permitted by the Indenture.
This Bond may be exchanged, and its transfer may be effected, only by
the registered owner hereof in person or by his attorney duly authorized in
writing at the designated corporate trust office of the Trustee, but only in the
manner, subject to the limitations and upon payment of the charges
6
<PAGE>
provided in the Indenture, and upon surrender and cancellation of this Bond.
Upon exchange or registration of such transfer a new registered bond or bonds of
the same series, maturity and interest rate and of Authorized Denomination for
the same aggregate principal amount will be issued in exchange therefor.
Florida Housing and the Trustee may deem and treat the person in whose
name this Bond shall be registered on the bond register, as the absolute owner
hereof for the purpose of receiving payment of or on account of principal hereof
and interest due hereon and for all other purposes and neither Florida Housing
nor the Trustee shall be affected by any notice to the contrary.
All acts, conditions and things required by the Constitution and the
laws of the State to exist, happen and be performed precedent to and in the
execution and delivery of the Indenture (hereinafter defined) and the issuance
of this Bond do exist, have happened and have been performed in due time, form
and manner as required by law.
No covenant or agreement contained in this Bond or the Indenture shall
be deemed to be a covenant or agreement of any official, officer, agent or
employee of Florida Housing in his or her individual capacity, and neither the
members of Florida Housing, nor any official executing this Bond, shall be
liable personally on this Bond or be subject to any personal liability or
accountability by reason of the issuance or sale of this Bond.
This Bond shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose until the Registrar shall have executed the
Certificate of Authentication appearing hereon.
7
<PAGE>
IN WITNESS WHEREOF, Florida Housing has caused this Bond to be executed
in its name by the manual or facsimile signature of its Chairman or Vice
Chairman and the facsimile of its seal to be hereunto affixed, impressed,
imprinted or reproduced hereon and attested by the manual or facsimile signature
of its Secretary or Assistant Secretary all as of July 22, 1998.
FLORIDA HOUSING FINANCE CORPORATION
[SEAL]
ATTEST: By: /s/ Clark D. Bennett
-----------------------------
Chairman
Susan J. Leigh
- --------------------------
Secretary
8
<PAGE>
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the within-mentioned Indenture.
Date of Authentication:
July 22, 1998
FIRST UNION NATIONAL BANK,
as Registrar
By: /s/ Brandon Devorak
------------------------
Authorized Signatory
CERTIFICATE OF VALIDATION
This Bond is one of a series of Bonds which were validated by Judgment of the
Circuit Court of the Second Judicial Circuit in and for Leon County, Florida,
rendered on November 12, 1997.
/s/ Lawton Chiles
LAWTON CHILES
Lawton Chiles, Governor of the State of
Florida, as Chairman of the Governing
Board of the Division of Bond Finance of
the State Board of Administration of
Florida
9
<PAGE>
[Form of Assigmnent for Transfer]
FOR VALUE RECEIVED, the undersigned, hereby sells, assigns and transfers unto
____________________________________________ (Tax Identification or Social
Security No. _____________________) the within bond and all rights thereunder,
and hereby irrevocably constitutes and appoints ________________________________
attorney to transfer the within bond on the books kept for registration thereof,
with full power or substitution in the premises.
Date:
--------------------
Signature
Signature Guaranteed:
-----------------------------------
NOTICE: Signature(s) must be NOTICE: The signature to this
Guaranteed by a signature assignment must correspond
guarantor institution that is with the name of the
a participant in a nationally registered owner of the within
recognized signature guarantor bond as it appears on the face
program. hereof in every particular,
without alteration or
enlargement or any change
whatever, and the Social
Security number or federal
employer identification must
be supplied.
Number: RCC-1 $3,850,000
California Statewide Communities Development Authority
Multifamily Housing Revenue Bond
(Lexington Square Project) Series 1998CC
<TABLE>
<CAPTION>
Initial
Dated Date: Maturity Date: Interest Rate:
----------- -------------- --------------
<S> <C> <C>
August 25, 1998 August 1, 2040 7.00%
</TABLE>
Registered Owner: CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
Principal Amount: THREE MILLION EIGHT HUNDRED FIFTY THOUSAND DOLLARS
California Statewide Communities Development Authority (the
"Issuer"), a joint exercise of powers agency duly organized and existing under
the laws of the State of California (the "State"), for value received hereby
promises to pay to the registered owner hereof stated above, or registered
assigns, at the maturity date stated above, but only from the sources and as
hereinafter provided, upon presentation and surrender of this Bond at the
corporate trust office of U.S. Bank Trust National Association in St. Paul,
Minnesota, as agent for U.S. Bank Trust National Association, San Francisco,
California, or its successor as trustee (the "Trustee"), under the Indenture
(described below), the principal amount stated above, and to pay interest on
said principal amount at the interest rate set forth above, from and including
the date of issuance of this Bond until the principal amount shall have been
paid in accordance with the terms of this Bond and the Indenture, as and when
set forth below, but only from the sources and as hereinafter provided, by wire
transfer if there be one Owner of all of the Bonds or otherwise by check mailed
to the record Owners of Bonds as the same appear upon the books of registry to
be maintained by the Trustee, as registrar.
This Bond is one of a series of bonds (the "Bonds") issued
pursuant to the provisions of Chapter 5 of Division 7 of Title 1 of the
California Government Code, together with the provisions of Chapter 7 of Part 5
of Division 31 of the California Health and Safety Code, as the same may be
amended (collectively, the "Act"), and a Trust Indenture, dated as of August 1,
1998, between the Issuer and the Trustee (as amended and supplemented from time
to time, the "Indenture"). Reference is made to the Indenture and the Act for a
full statement of their respective terms. Capitalized terms used herein and not
otherwise defined herein have the respective meanings accorded such terms in the
Indenture, which are hereby incorporated herein by reference. The Bonds issued
under the Indenture are expressly limited to $3,850,000 in aggregate principal
amount at any time Outstanding and are all of like tenor, except as to numbers
and denominations, and are issued for the purposes of providing construction and
permanent financing for a qualified multifamily rental housing development in
the State and paying of certain expenses incidental thereto.
<PAGE>
The Bonds shall be special and limited obligations of the Issuer
payable only from the sources provided in this Indenture and neither the State
nor any other political subdivision thereof shall be liable on the Bonds.
Neither the State nor any political subdivision thereof shall in any event be
liable for the payment of the principal of or interest on any Bonds, or for the
performance of any pledge, deed of trust, obligation or agreement of any kind
whatsoever that may be undertaken by the Issuer, and none of the Bonds or any of
its agreements or obligations shall be construed to constitute a debt or a
pledge of the faith and credit of the State or any political subdivision thereof
within the meaning of any constitutional or statutory provision whatsoever, and
shall not directly, indirectly or contingently obligate the State or any of its
political subdivisions to levy or to pledge any form of taxation whatsoever
therefor or to make an appropriation for the payment thereof; nor shall any
breach of any such pledge, deed of trust, obligation or agreement impose any
pecuniary liability upon any member, officer, employee or agent of the Issuer,
or any charge upon the general credit of the Issuer, or any pecuniary liability
upon the Issuer payable from any moneys, revenues, payments and proceeds other
than those first above specified.
NEITHER THE MEMBERS OF THE ISSUER NOR ANY PERSONS EXECUTING THIS BOND
SHALL BE LIABLE PERSONALLY ON THE BONDS BY REASON OF THE ISSUANCE THEREOF. THE
BONDS SHALL NOT BE A DEBT OF THE STATE OR ANY POLITICAL SUBDIVISION THEREOF
(OTHER THAN THE ISSUER TO THE EXTENT PROVIDED HEREIN), AND NEITHER THE STATE NOR
ANY POLITICAL SUBDIVISION THEREOF (OTHER THAN THE ISSUER) SHALL BE LIABLE
THEREON, NOR IN ANY EVENT SHALL THE BONDS BE PAYABLE OUT OF ANY FUNDS OR
PROPERTIES OTHER THAN THOSE OF THE ISSUER SPECIFICALLY PLEDGED THERETO. THE
BONDS SHALL NOT CONSTITUTE AN INDEBTEDNESS WITHIN THE MEANING OF ANY
CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. THE ISSUER HAS NO
TAXING POWER.
Interest on the Bonds. The Bonds (including this Bond) shall bear
interest on the outstanding principal amount thereof at a rate of seven percent
(7.00%) per annum calculated on the basis of a 360-day year comprised of twelve
30-day months from the date of issuance of the Bonds to the Completion Date, and
thereafter at a rate of six and 375/1000 percent (6.375%) per annum calculated
on the basis of a 360-day year comprised of twelve 30-day months, until paid on
the Maturity Date or upon earlier redemption or acceleration, unless and until
there shall have occurred an Involuntary Retirement, in which event the Bond
shall bear interest at a rate of seven and one-eighth percent (7.125%) per
annum, calculated as aforesaid, of which amount .75% shall be payable only from
and to the extent of Net Project Revenues. The interest payable on the Bonds as
provided above shall be payable on the first day of each month, commencing
October 1, 1998, and on each Bond Payment Date.
Limited Recourse. Pursuant to a Loan Agreement dated as of August 1,
1998, and a Promissory Note (the "Note") dated the date of issuance of the
Bonds, Clovis Bedford Limited, a California limited partnership (the
"Developer"), has agreed to make payments to the Issuer in amounts equal to
amounts of principal of and premium, if any, and interest on the Bonds. THE
OBLIGATIONS OF THE ISSUER ON THIS BOND ARE EXPRESSLY LIMITED TO AND ARE PAYABLE
SOLELY FROM (I) THE PAYMENTS MADE PURSUANT TO THE LOAN AGREEMENT AND THE NOTE BY
THE DEVELOPER, AND THE SECURITY THEREFOR PROVIDED BY THE FIRST DEED OF TRUST AND
SECURITY AGREEMENT FROM THE DEVELOPER TO THE
2
<PAGE>
BENEFIT OF THE TRUSTEE, TO BE DATED AS OF AUGUST 1, 1998, ALL OF WHICH HAVE BEEN
ASSIGNED TO THE TRUSTEE PURSUANT TO THE INDENTURE AND (II) ANY ADDITIONAL
SECURITY PROVIDED IN THE INDENTURE.
Registration and Transfer. This Bond is transferable by the
registered owner hereof in person or by his attorney duly authorized in writing
at the office of the Trustee as registrar, but only in the manner, subject to
the limitations and upon payment of the charges provided in the Indenture, and
upon surrender and cancellation of this Bond. Upon such transfer a new
registered Bond or Bonds, of any authorized denomination or denominations, of
the same maturity and for the same aggregate principal amount will be issued to
the transferee in exchange herefor. The Bonds are issuable as fully registered
Bonds in Authorized Denominations as provided in the Indenture.
Redemption of Bonds. The Bonds are subject to optional and mandatory
redemption by the Issuer and purchase in lieu of redemption by the Developer
prior to maturity as a whole or in part at such time or times, under such
circumstances, at such redemption prices and in such manner as is set forth in
the Indenture.
Enforcement. Only the Majority Owner shall have the right to enforce
the provisions of this Bond or the Indenture or to institute any action to
enforce the covenants herein or therein, or to take any action with respect to
any Event of Default under the Indenture, or to institute, appear in or defend
any suit or other proceedings with respect thereto, except as provided in the
Indenture. If an Event of Default occurs and is continuing, the principal of all
Bonds then outstanding may be declared due and payable by the Majority Owner
upon the conditions and in the manner and with the effect provided in the
Indenture. As provided in the Indenture, and to the extent permitted by law,
interest and a penalty rate of interest shall be payable on unpaid amounts due
hereon.
Discharge. The Indenture prescribes the manner in which it may be
discharged and after which the Bonds shall be deemed to be paid and no longer be
secured by or entitled to the benefits of the Indenture, except for the purposes
of registration and exchange of Bonds and of such payment.
Modifications. Modifications or alterations of the Indenture, or of
any supplements thereto, may be made only to the extent and in the circumstances
permitted by the Indenture.
This Bond shall not be valid or obligatory for any purpose until it
shall have been signed on behalf of the Issuer and such signature attested, by
the officer, and in the manner, provided in the Indenture, and authenticated by
a duly authorized officer of the Trustee, as Authenticating Agent.
It is hereby certified and recited that all conditions, acts and
things required by the statutes of the State or by the Act or the Indenture to
exist, to have happened or to have been performed precedent to or in the
issuance of this Bond exist, have happened and have been performed and that the
issue of the Bonds, together with all other indebtedness of the Issuer, is
within every debt and other limit prescribed by said statutes.
3
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this Bond to be executed as
of the Dated Date stated above.
CALIFORNIA STATEWIDE COMMUNITIES
DEVELOPMENT AUTHORITY
By: /s/ Gerald P. Burke
---------------------------------
Chairman
Attest:
/s/ Norma Lammers
- -----------------------------
Secretary
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the within mentioned Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION, as
Trustee and Authenticating Agent
By: /s/ James V. Myers
-------------------------------------
Authorized Signatory
Date of Authentication: 8/25/98
---------------------
4
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________________________ the within Bond and hereby authorizes the
transfer of this Bond on the registration books of the Trustee.
Dated:
-------------------------
-----------------------------------
Authorized Signature
-----------------------------------
Name of Transferee
Signature Guaranteed by:
- ---------------------------------
Name of Bank
By:
-----------------------------
Title:
--------------------------
5
Number: RBB-l $13,250,000
California Statewide Communities Development Authority
Multifamily Housing Revenue Bond
(Northpointe Village Project) Series 1998BB
<TABLE>
<CAPTION>
Initial
Dated Date: Maturity Date: Interest Rate:
----------- -------------- --------------
<S> <C> <C>
August 25, 1998 August 1, 2040 7.965%
</TABLE>
Registered Owner: CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
Principal Amount: THIRTEEN MILLION TWO HUNDRED FIFTY THOUSAND
DOLLARS
California Statewide Communities Development Authority (the "Issuer"), a
joint exercise of powers agency duly organized and existing under the laws of
the State of California (the "State"), for value received hereby promises to pay
to the registered owner hereof stated above, or registered assigns, at the
maturity date stated above, but only from the sources and as hereinafter
provided, upon presentation and surrender of this Bond at the corporate trust
office of U.S. Bank Trust National Association in St. Paul, Minnesota, as agent
for U.S. Bank Trust National Association, San Francisco, California, or its
successor as trustee (the "Trustee"), under the Indenture (described below), the
principal amount stated above, and to pay interest on said principal amount at
the interest rate set forth above, from and including the date of issuance of
this Bond until the principal amount shall have been paid in accordance with the
terms of this Bond and the Indenture, as and when set forth below, but only from
the sources and as hereinafter provided, by wire transfer if there be one Owner
of all of the Bonds or otherwise by check mailed to the record Owners of Bonds
as the same appear upon the books of registry to be maintained by the Trustee,
as registrar.
This Bond is one of a series of bonds (the "Bonds") issued pursuant to
the provisions of Chapter 5 of Division 7 of Title 1 of the California
Government Code, together with the provisions of Chapter 7 of Part 5 of Division
31 of the California Health and Safety Code, as the same may be amended
(collectively, the "Act"), and a Trust Indenture, dated as of August 1, 1998,
between the Issuer and the Trustee (as amended and supplemented from time to
time, the "Indenture"). Reference is made to the Indenture and the Act for a
full statement of their respective terms. Capitalized terms used herein and not
otherwise defined herein have the respective meanings accorded such terms in the
Indenture, which are hereby incorporated herein by reference. The Bonds issued
under the Indenture are expressly limited to $13,250,000 in aggregate principal
amount at any time Outstanding and are all of like tenor, except as to numbers
and denominations, and are issued for the purposes of providing construction and
permanent financing for a qualified multifamily rental housing development in
the State and paying of certain expenses incidental thereto.
<PAGE>
The Bonds shall be special and limited obligations of the Issuer payable
only from the sources provided in this Indenture and neither the State nor any
other political subdivision thereof shall be liable on the Bonds. Neither the
State nor any political subdivision thereof shall in any event be liable for the
payment of the principal of or interest on any Bonds, or for the performance of
any pledge, deed of trust, obligation or agreement of any kind whatsoever that
may be undertaken by the Issuer, and none of the Bonds or any of its agreements
or obligations shall be construed to constitute a debt or a pledge of the faith
and credit of the State or any political subdivision thereof within the meaning
of any constitutional or statutory provision whatsoever, and shall not directly,
indirectly or contingently obligate the State or any of its political
subdivisions to levy or to pledge any form of taxation whatsoever therefor or to
make an appropriation for the payment thereof; nor shall any breach of any such
pledge, deed of trust, obligation or agreement impose any pecuniary liability
upon any member, officer, employee or agent of the Issuer, or any charge upon
the general credit of the Issuer, or any pecuniary liability upon the Issuer
payable from any moneys, revenues, payments and proceeds other than those first
above specified.
NEITHER THE MEEMBERS OF THE ISSUER NOR ANY PERSONS EXECUTING THIS BOND
SHALL BE LIABLE PERSONALLY ON THE BONDS BY REASON OF THE ISSUANCE THEREOF. THE
BONDS SHALL NOT BE A DEBT OF THE STATE OR ANY POLITICAL SUBDIVISION THEREOF
(OTHER THAN THE ISSUER TO THE EXTENT PROVIDED HEREIN), AND NEITHER THE STATE NOR
ANY POLITICAL SUBDIVISION THEREOF (OTHER THAN THE ISSUER) SHALL BE LIABLE
THEREON, NOR IN ANY EVENT SHALL THE BONDS BE PAYABLE OUT OF ANY FUNDS OR
PROPERTIES OTHER THAN THOSE OF THE ISSUER SPECIFICALLY PLEDGED THERETO. THE
BONDS SHALL NOT CONSTITUTE AN INDEBTEDNESS WITHIN THE MEANING OF ANY
CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. THE ISSUER HAS NO
TAXING POWER.
Interest on the Bonds. The Bonds (including this Bond) shall bear
interest on the outstanding principal amount thereof at a rate of seven and
965/1000 percent (7.965%) per annum calculated on the basis of a 360-day year
comprised of twelve 30-day months from the date of issuance of the Bonds to the
Completion Date, and thereafter at a rate of seven and 34/100 (7.34%) per annum
calculated on the basis of a 360-day year comprised of twelve 30-day months,
until paid on the Maturity Date or upon earlier redemption or acceleration. The
interest payable on the Bonds as provided above shall be payable on the first
day of each month, commencing October 1, 1998, and on each Bond Payment Date. In
the event the Issuer issues on or before March 1, 1999, multifamily housing
revenue bonds for the benefit of the Carrington Pointe Apartments located in Los
Banos, California (the "Carrington Point Bonds"), and the Carrington Pointe
Bonds are purchased by the Majority Owner, then the interest rate on the Bonds,
calculated as aforesaid, from and after the closing date for the Carrington
Point Bonds, shall be 8.125% until the completion date for such project and
thereafter shall be 7.5%.
Limited Recourse. Pursuant to a Loan Agreement dated as of August 1,
1998, and a Promissory Note (the "Note") dated the date of issuance of the
Bonds, Fresno Northpointe Limited, a California limited partnership (the
"Developer"), has agreed to make payments to the Issuer in amounts equal to
amounts of principal of and premium, if any, and interest on the Bonds. THE
OBLIGATIONS OF THE ISSUER ON THIS BOND ARE EXPRESSLY LIMITED TO AND ARE PAYABLE
SOLELY FROM (I) THE PAYMENTS MADE PURSUANT TO THE LOAN AGREEMENT AND
2
<PAGE>
THE NOTE BY THE DEVELOPER, AND THE SECURITY THEREFOR PROVIDED BY THE FIRST DEED
OF TRUST AND SECURITY AGREEMENT FROM THE DEVELOPER TO THE BENEFIT OF THE
TRUSTEE, TO BE DATED AS OF AUGUST 1, 1998, ALL OF WHICH HAVE BEEN ASSIGNED TO
THE TRUSTEE PURSUANT TO THE INDENTURE AND (II) ANY ADDITIONAL SECURITY PROVIDED
IN THE INDENTURE.
Registration and Transfer. This Bond is transferable by the registered
owner hereof in person or by his attorney duly authorized in writing at the
office of the Trustee as registrar, but only in the manner, subject to the
limitations and upon payment of the charges provided in the Indenture, and upon
surrender and cancellation of this Bond. Upon such transfer a new registered
Bond or Bonds, of any authorized denomination or denominations, of the same
maturity and for the same aggregate principal amount will be issued to the
transferee in exchange herefor. The Bonds are issuable as fully registered Bonds
in Authorized Denominations as provided in the Indenture.
Redemption of Bonds. The Bonds are subject to optional and mandatory
redemption by the Issuer and purchase in lieu of redemption by the Developer
prior to maturity as a whole or in part at such time or times, under such
circumstances, at such redemption prices and in such manner as is set forth in
the Indenture.
Enforcement. Only the Majority Owner shall have the right to enforce the
provisions of this Bond or the Indenture or to institute any action to enforce
the covenants herein or therein, or to take any action with respect to any Event
of Default under the Indenture, or to institute, appear in or defend any suit or
other proceedings with respect thereto, except as provided in the Indenture. If
an Event of Default occurs and is continuing, the principal of all Bonds then
outstanding may be declared due and payable by the Majority Owner upon the
conditions and in the manner and with the effect provided in the Indenture. As
provided in the Indenture, and to the extent permitted by law, interest and a
penalty rate of interest shall be payable on unpaid amounts due hereon.
Discharge. The Indenture prescribes the manner in which it may be
discharged and after which the Bonds shall be deemed to be paid and no longer be
secured by or entitled to the benefits of the Indenture, except for the purposes
of registration and exchange of Bonds and of such payment.
Modifications. Modifications or alterations of the Indenture, or of any
supplements thereto, may be made only to the extent and in the circumstances
permitted by the Indenture.
This Bond shall not be valid or obligatory for any purpose until it
shall have been signed on behalf of the Issuer and such signature attested, by
the officer, and in the manner, provided in the Indenture, and authenticated by
a duly authorized officer of the Trustee, as Authenticating Agent.
It is hereby certified and recited that all conditions, acts and things
required by the statutes of the State or by the Act or the Indenture to exist,
to have happened or to have been performed precedent to or in the issuance of
this Bond exist, have happened and have been performed and that the issue of the
Bonds, together with all other indebtedness of the Issuer, is within every debt
and other limit prescribed by said statutes.
3
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this Bond to be executed as
of the Dated Date stated above.
CALIFORNIA STATEWIDE COMMUNITIES
DEVELOPMENT AUTHORITY
By: /s/ Gerald P. Burke
------------------------------------
Chairman
Attest:
/s/ Norma Lammers
- -------------------------
Secretary
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the within mentioned Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION, as
Trustee and Authenticating Agent
By: /s/ James V. Myers
--------------------------------
Authorized Signatory
Date of Authentication: 8/25/98
---------------------
4
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _____________________________ the within Bond and hereby authorizes the
transfer of this Bond on the registration books of the Trustee.
Dated:
-------------------------
------------------------------
Authorized Signature
------------------------------
Name of Transferee
Signature Guaranteed by:
- -------------------------------
Name of Bank
By:
----------------------------
Title:
-------------------------
5
UNITED STATES OF AMERICA
STATE OF INDIANA
CITY OF INDIANAPOLIS, INDIANA
Multifamily Housing Revenue Bonds
(Falcon Creek Place Apartments Project)
Series 1998
Number: R-1
Dated Date: September 14, 1998
Maturity Date: August 31, 2038
Registered Owner: Charter Municipal Mortgage Acceptance Company
Principal Amount: $6,144,600
Interest Rate: From the Dated Date to and including August 31, 2000 at the rate
of 7.00% per annum, and thereafter at the rate of 7.25% per annum
The City of Indianapolis, Indiana (the "Issuer"), a municipal
corporation and political subdivision of the State of Indiana (the "State"),
created and existing under and by virtue of the laws of the State, hereby
acknowledges itself indebted and for value received promises to pay to the
registered owner hereof stated above, or registered assigns, at the maturity
date stated above, but only from the sources and as hereinafter provided, upon
presentation and surrender of this Bond at the principal office of Norwest
Bank Indiana, N.A. in Fort Wayne, Indiana or its successor as trustee (the
"Trustee"), under the Indenture (described below), the principal amount stated
above, and to pay interest on said principal amount at the interest rate set
forth above, from and including the dated date hereof until the principal amount
shall have been paid in accordance with the terms of this Bond and the
Indenture, as and when set forth below, but only from the sources and as
hereinafter provided, by wire transfer if there be one Owner of all of the Bonds
or otherwise by check or draft mailed to the record Owners of Bonds as the same
appear upon the books of registry to be maintained by the Trustee, as registrar.
This Bond is one of a series of bonds (the "Bonds") issued pursuant
to, and is subject to, the Trust Indenture dated as of September 1, 1998 between
the Issuer and the Trustee (as amended and supplemented from time to time, the
"Indenture"), and Article 7, Chapters 11.9 and 12 of Title 36 of the Indiana
Code, as amended (the "Act"). Reference is made to the Indenture and the Act for
a full statement of their respective terms. Capitalized terms used herein and
not otherwise defined herein have the respective meanings accorded such terms in
the Indenture, which are hereby incorporated herein by reference. The Bonds
issued under the Indenture are expressly limited to $6,144,600 in aggregate
principal amount at any time Outstanding and are all of like tenor, except as to
numbers and denominations, and are issued for the purposes of providing
construction and permanent financing for qualified multifamily rental housing
units in the State and of paying certain expenses incidental thereto.
The Bonds shall be special and limited obligations of the Issuer
payable only from the sources provided in the Indenture and neither the State
nor any other political subdivision thereof shall be liable on the Bonds.
Neither the State of Indiana nor any political subdivision thereof shall in any
event be liable for the payment of the principal of or any interest on any
Bonds, or for the performance of any pledge, deed of trust, obligation or
agreement of any kind whatsoever that may be undertaken by the Issuer, and none
of the Bonds or any of its agreements or obligations shall be constructed to
constitute a debt or a pledge of the faith and credit of the Issuer, the State
of indiana or any political
<PAGE>
subdivision thereof within the meaning of any constitutional or statutory
provision whatsoever, and shall not directly, indirectly or contingently
obligate the Issuer, the State of Indiana or any of its political subdivisions
to levy or to pledge any form of taxation whatsoever therefor or to make an
appropriation for the payment thereof; nor shall any breach of such pledge, deed
of trust, obligation or agreement impose any pecuniary liability upon any
member, officer, employee or agent of the Issuer, or any charge upon the general
credit of the Issuer, or any pecuniary liability upon the Issuer payable from
any moneys, revenues, payments and proceeds other than those first above
specified.
Interest on the Bonds. The Bonds (including this Bond) shall bear
interest on the outstanding principal amount thereof, payable on each Interest
Payment Date (a) from the Closing Date to, but not including the Conversion
Date, at a rate of seven percent (7.00%) per annum, computed on the basis of a
360-day year of twelve 30-day months, and thereafter at a rate of seven and
one-quarter percent (7.25%) per annum, computed on the basis of a 360-day year
of twelve 30-day months until paid on the Maturity Date or upon earlier
redemption or acceleration. The interest payable on the Bonds as provided above
shall be payable on the first Business Day of each month, commencing October 1,
1998, and on each Bond Payment Date.
Limited Recourse. Pursuant to a Loan Agreement dated as of September
1, 1998, and a Promissory Note (the "Note") dated the date of issuance of the
Bonds, Falcon Creek Place L.P.-1998, an Indiana limited partnership (the
"Developer"), has agreed to make payments to the Issuer in amounts equal to
amounts of principal of and premium, if any, an interest on the Bonds. THIS
BOND DOES NOT AND SHALL NOT REPRESENT OR CONSTITUTE A DEBT OF THE ISSUER, THE
STATE OF INDIANA OR ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF THE
PROVISIONS OF THE CONSTITUTION OF THE STATE OF INDIANA OR A PLEDGE OF THE FAITH
AND CREDIT OF THE ISSUER, THE STATE OF INDIANA OR ANY POLITICAL SUBDIVISION
THEREOF. NEITHER THE FAITH AND CREDIT NOT THE TAXING POWER OF THE ISSUER, THE
STATE OF INDIANA OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED, GIVEN OR
LOANED TO THE PAYMENT OF THE PRINCIPAL OF, REDEMPTION PREMIUM, IF ANY, OR
INTEREST ON THIS BOND. THE OBLIGATIONS OF THE ISSUER ON THIS BOND ARE EXPRESSLY
LIMITED TO AND ARE PAYABLE SOLELY FROM (a) THE PAYMENTS MADE PURSUANT TO THE
LOAN AGREEMENT AND THE NOTE BY THE DEVELOPER, AND THE SECURITY THEREFOR PROVIDED
BY THE FIRST MORTGAGE AND SECURITY AGREEMENT FROM THE DEVELOPER FOR THE BENEFIT
OF THE TRUSTEE, TO BE DATED AS OF THE INITIAL PERIOD EXPIRATION DATE, AND THE
ASSIGNMENT OF LEASES, RENTS AND OTHER INCOME FROM THE DEVELOPER TO THE TRUSTEE,
TO BE DATED AS OF THE INITIAL PERIOD EXPIRATION DATE, ALL OF WHICH HAVE BEEN
ASSIGNED OR, AS APPLICABLE, WILL BE ASSIGNED ON THE INITIAL PERIOD EXPIRATION
DATE, TO THE TRUSTEE PURSUANT TO THE INDENTURE AND (b) ANY ADDITIONAL SECURITY
PROVIDED IN THE INDENTURE.
Registration and Transfer. This Bond is transferable by the
registered owner hereof in person or by his attorney duly authorized in writing
at the office of the Trustee as registrar, but only in the manner, subject to
the limitations and upon payment of the charges provided in the Indenture, and
upon surrender and cancellation of this Bond. Upon such transfer a new
registered Bond or Bonds, of any authorized denomination or denominations, of
the same maturity and for the same aggregate principal amount will be issued to
the transferee in exchange herefor. The Bonds are issuable as fully registered
Bonds in Authorized Denominations as provided in the Indenture. The Issuer, the
Trustee, and any other person may treat the person in whose name this Bond is
registered on the books of registry as the Owner hereof for the purpose of
receiving payment as herein provided and for all other purposes, whether or not
this Bond be overdue, and no person shall be affected by notice to the contrary.
-2-
<PAGE>
Redemption of Bonds. The Bonds are subject to mandatory redemption by
the Issuer and purchase in lieu of redemption by the Developer prior to maturity
as a whole or in part at such time or times, under such circumstances, at such
redemption prices and in such manner as is set forth in the Indenture. The Bonds
are subject to optional redemption by the Issuer prior to maturity as a whole or
in part at such time or times, under such circumstances, at such redemption
prices and in such manner as is set forth in the Indenture.
Enforcement. Only the Majority Owner, or the Trustee upon the
direction of the Majority Owner, shall have the right to enforce the provisions
of this Bond or the Indenture or to institute any action to enforce the
covenants herein or therein, or to take any action with respect to any Event of
Default under the Indenture, or to institute, appear in or defend any suit or
other proceedings with respect thereto, except as provided in the Indenture. If
an Event of Default occurs and is continuing, the principal of all Bonds then
outstanding may be declared due and payable by the Trustee upon the direction of
the Majority Owner upon the conditions and in the manner and with the effect
provided in the Indenture. As provided in the Indenture, and to the extent
permitted by law, interest and a penalty rate of interest shall be payable on
unpaid amounts due hereon.
Discharge. This Indenture prescribes the manner in which it may be
discharged and after which the Bonds shall be deemed to be paid and no longer be
secured by or entitled to the benefits of the Indenture, except for the purposes
of registration and exchange of Bonds and of such payment.
Modifications. Modifications or alternations of the Indenture, or any
supplements thereto, may be made only to the extent and in the circumstances
permitted by the Indenture.
This Bond shall not be valid or obligatory for any purpose until it
shall have been signed on behalf of the Issuer and such signature
attested, by the officer, and in the manner, as provided in the Indenture, and
authenticated by a duly authorized officer of the Trustee, as Authenticating
Agent.
It is hereby certified and recited that all conditions, acts and
things required by the statutes of the State or by the Act or the Indenture to
exist, to have happened or to have been performed precedent to or in the
issuance of this Bond exist, have happened and have been performed and that the
issue of the Bonds, together with all other indebtedness of the Issuer, is
within every debt and other limit prescribed by said statutes.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be executed as
of the Dated Date stated above.
CITY OF INDIANAPOLIS, INDIANA
By: /s/ Stephen Goldsmith
--------------------------
Stephen Goldsmith, Mayor
(SEAL)
ATTEST:
/s/ Suellen Hart
- ----------------------
Suellen Hart, Clerk
-3-
<PAGE>
FORM OF CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the within mentioned
Indenture and is one of the Multifamily Housing Revenue Bonds (Falcon Creek
Apartments Project) Series 1998 of the City of Indianapolis, Indiana.
NORWEST BANK INDIANA, N.A.,
as Trustee and Authenticating Agent
By:/s/ Melvin W. Bredemeier
------------------------------------------
Authorized Signatory
Date of Authentication: September 14, 1998
FORM OF ASSIGNMENT
------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _________________________________ the within and hereby
authorizes the transfer of this Bond on the registration books of the Trustee.
Dated:
------------------------
------------------------------------------
Authorized Signature
------------------------------------------
Name of Transferee
- -------------------------------
Signature Guaranteed by
- -------------------------------
Name of Bank
By:
-----------------------------
Title:
--------------------------
-4-
UNITED STATES OF AMERICA
STATE OF FLORIDA
Housing Finance Authority of Miami-Dade County (Florida)
Multifamily Mortgage Revenue Bond
(Jubilee Courtyards Apartments Project)
Series 1998-5
Number: R-1
Dated Date: September 15, 1998
Maturity Date: September 1, 2040
Registered Owner: CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
Principal Amount: $4,150,000
Interest Rate: 7.00% per annum to, but not including, October 1, 2000, and
7.125% per annum thereafter
The Housing Finance Authority of Miami-Dade County (Florida) (the
"Issuer"), a public body corporate and politic organized and existing under the
laws of the State of Florida (the "State"), hereby acknowledges itself indebted
and for value received promises to pay to the registered owner hereof stated
above, or registered assigns, at the maturity date stated above, but only from
the sources and as hereinafter provided, upon presentation and surrender of this
Bond at the designated office of The Bank of New York in Jacksonville, Florida
or its successor as trustee (the "Trustee"), under the Indenture (described
below), the principal amount stated above, and to pay interest on said principal
amount at the interest rate set forth above, from and including the dated date
hereof until the principal amount shall have been paid in accordance with the
terms of this Bond and the Indenture, as and when set forth below, but only from
the sources and as hereinafter provided, by wire transfer if there be one Owner
of all of the Bonds or otherwise by check or draft mailed to the record Owners
of Bonds as the same appear upon the books of registry to be maintained by the
Trustee, as registrar.
This Bond is one of a series of bonds (the "Bonds") issued pursuant
to, and is subject to, the Trust Indenture dated as of September 1, 1998 between
the Issuer and the Trustee (as amended and supplemented from time to time, the
"Indenture"), and Chapter 159, Part IV, Florida Statues, as amended (the "Act").
Reference is made to the Indenture and the Act for a full statement of their
respective terms. Capitalized terms used herein and not otherwise defined herein
have the respective meanings accorded such terms in the Indenture, which are
hereby incorporated herein by reference. The Bonds issued under the Indenture
are expressly limited to $4,150,000 in aggregate principal amount at any time
Outstanding and are all of like tenor, except as to numbers and denominations,
and are issued for the purposes of providing construction and permanent
financing for qualified multifamily rental housing units in the State and of
paying certain expenses incidental thereto.
1
<PAGE>
The Bonds shall be special and limited obligations of the Issuer
payable only from the sources provided in this Indenture and neither the State
nor any other political subdivision thereof shall be liable on the Bonds.
NEITHER THE STATE OF FLORIDA NOR ANY POLITICAL SUBDIVISION THEREOF SHALL IN ANY
EVENT BE LIABLE FOR THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON ANY BONDS, OR
FOR THE PERFORMANCE OF ANY PLEDGE, DEED OF TRUST, OBLIGATION OR AGREEMENT OF ANY
KIND WHATSOEVER THAT MAY BE UNDERTAKEN BY THE ISSUER, AND NONE OF THE BONDS OR
ANY OF ITS AGREEMENTS OR OBLIGATIONS SHALL BE CONSTRUED TO CONSTITUTE A DEBT OR
A PLEDGE OF THE FAITH AND CREDIT OF THE STATE OF FLORIDA OR ANY POLITICAL
SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY
PROVISION WHATSOEVER, AND SHALL NOT DIRECTLY, INDIRECTLY OR CONTINGENTLY
OBLIGATE THE STATE OF FLORIDA OR ANY OF ITS POLITICAL SUBDIVISIONS TO LEVY OR TO
PLEDGE ANY FORM OF TAXATION WHATSOEVER THEREFOR OR TO MAKE AN APPROPRIATION FOR
THE PAYMENT THEREOF; NOR SHALL ANY BREACH OF ANY SUCH PLEDGE, DEED OF TRUST,
OBLIGATION OR AGREEMENT IMPOSE ANY PECUNIARY LIABILITY UPON ANY MEMBER, OFFICER,
EMPLOYEE OR AGENT OF THE ISSUER, OR ANY CHARGE UPON THE GENERAL CREDIT OF THE
ISSUER, OR ANY PECUNIARY LIABILITY UPON THE ISSUER PAYABLE FROM ANY MONEYS,
REVENUES, PAYMENTS AND PROCEEDS OTHER THAN THOSE FIRST ABOVE SPECIFIED.
Interest on the Bonds. The Bonds (including this Bond) shall bear
interest on the outstanding principal amount thereof from September 1, 1998, but
not including October 1, 2000 at a rate of 7.00 percent per annum, and
thereafter to the date of maturity or redemption or acceleration prior to
maturity at a rate of 7.125 percent (7.125%) per annum comprised of twelve
30-day months. The interest payable on the Bonds as provided above shall be
payable on the first business day of each month, commencing October 1, 1998,
and on each Bond Payment Date.
Limited Recourse. Pursuant to a Loan Agreement dated as of September
1, 1998, and a Promissory Note (the "Note") dated the date of issuance of the
Bonds, Jubilee Courtyards Associates, Ltd., a Florida limited partnership (the
"Developer"), has agreed to make payments to the Issuer in amounts equal to
amounts of principal of and premium, if any, and interest on the Bonds. THE
OBLIGATIONS OF THE ISSUER ON THIS BOND ARE EXPRESSLY LIMITED TO AND ARE PAYABLE
SOLELY FROM (I) THE PAYMENTS MADE PURSUANT TO THE LOAN AGREEMENT AND THE NOTE BY
THE DEVELOPER, AND THE SECURITY THEREFOR PROVIDED BY THE MORTGAGE AND SECURITY
AGREEMENT FROM THE DEVELOPER FOR THE BENEFIT OF THE TRUSTEE, DATED AS OF
SEPTEMBER 1, 1998, AND THE ASSIGNMENT OF LEASES, RENTS AND OTHER INCOME FROM THE
DEVELOPER TO THE TRUSTEE, DATED AS OF SEPTEMBER 1, 1998, ALL OF WHICH HAVE BEEN
ASSIGNED TO THE TRUSTEE PURSUANT TO THE INDENTURE, (II) PAYMENTS MADE UNDER THE
COOPERATION AGREEMENT AND (III) ANY ADDITIONAL SECURITY PROVIDED IN THE
INDENTURE.
2
<PAGE>
Registration and Transfer. This Bond is transferable by the
registered owner hereof in person or by his attorney duly authorized in writing
at the office of the Trustee as registrar, but only in the manner, subject to
the limitations and upon payment of the charges provided in the Indenture, and
upon surrender and cancellation of this Bond. Upon such transfer a new
registered Bond or Bonds, of any authorized denomination or denominations, of
the same maturity and for the same aggregate principal amount will be issued to
the transferee in exchange herefor. The Bonds are issuable as fully registered
Bonds in Authorized Denominations as provided in the Indenture. The Issuer, the
Trustee, and any other person may treat the person in whose name this Bond is
registered on the books of registry as the Owner hereof for the purpose of
receiving payment as herein provided and for all other purposes, whether or not
this Bond be overdue, and no person shall be affected by notice to the contrary.
NOTWITHSTANDING ANYTHING IN THIS BOND OR THE INDENTURE TO THE CONTRARY,
NO BOND SHALL BE ACCEPTED FOR TRANSFER UNDER THE INDENTURE UNLESS THERE SHALL
FIRST HAVE BEEN DELIVERED TO THE TRUSTEE BY THE PROPOSED TRANSFEREE A DULY
EXECUTED INVESTMENT LETTER SUBSTANTIALLY IN THE FORM APPENDED AS EXHIBIT C
THERETO.
Redemption of Bonds. The Bonds are subject to optional and mandatory
redemption by the Issuer and purchase in lieu of redemption by the Developer
prior to maturity as a whole or in part at such time or times, under such
circumstances, at such redemption prices and in such manner as is set forth in
the Indenture.
Enforcement. Only the Majority Owner shall have the right to enforce
the provisions of this Bond or the Indenture or to institute any action to
enforce the covenants herein or therein, or to take any action with respect to
any Event of Default under the Indenture, or to institute, appear in or defend
any suit or other proceedings with respect thereto, except as provided in the
Indenture. If an Event of Default occurs and is continuing, the principal of all
Bonds then outstanding may be declared due and payable by the Majority Owner
upon the conditions and in the manner and with the effect provided in the
Indenture. As provided in the Indenture, and to the extent permitted by law,
interest and a penalty rate of interest shall be payable on unpaid amounts due
hereon.
Discharge. The Indenture prescribes the manner in which it may be
discharged and after which the Bonds shall be deemed to be paid and no longer be
secured by or entitled to the benefits of the Indenture, except for the purposes
of registration and exchange of Bonds and of such payment.
Modifications. Modifications or alterations of the Indenture, or of
any supplements thereto, may be made only to the extent and in the circumstances
permitted by the Indenture.
This Bond shall not be valid or obligatory for any purpose until it
shall have been signed on behalf of the Issuer and such signature attested, by
the officer, and in the manner, provided in the Indenture, and authenticated by
a duly authorized officer of the Trustee, as Authenticating Agent.
3
<PAGE>
It is hereby certified and recited that all conditions, acts and
things required by the statutes of the State or by the Act or the Indenture to
exist, to have happened or to have been performed precedent to or in the
issuance of this Bond exist, have happened and have been performed and that the
issue of the Bonds, together with all other indebtedness of the Issuer, is
within every debt and other limit prescribed by said statutes.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be executed as
of the Dated Date stated above.
HOUSING FINANCE AUTHORITY OF MIAMI-DADE
COUNTY (FLORIDA)
By: /s/ Milton J. Wallace
-----------------------------------------
Milton J. Wallace, Chairman
(SEAL)
Attest:
/s/ Shalley Jones
- -------------------------
Shalley Jones, Secretary
Approved as to form and legal sufficiency
/s/ Gerald Hefferman
- -------------------------
Assistant County Attorney
4
<PAGE>
FORM OF CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the within mentioned
Indenture and is one of the Multifamily Mortgage Revenue Bonds (Jubilee
Courtyards Apartments Project) Series 1998-5 of the Housing Finance Authority of
Miami-Dade County (Florida).
THE BANK OF NEW YORK,
as Trustee and Authenticating Agent
By: /s/ Elizabeth R. Feezor
------------------------------------
Authorized Signatory
Date of Authentication: September 15, 1998
<PAGE>
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ___________________________________________________ the within and hereby
authorizes the transfer of this Bond on the registration books of the Trustee.
Dated:
---------------------------------
---------------------------------
Authorized Signature
---------------------------------
Name of Transferee
- ---------------------------------------
Signature Guaranteed by
- ---------------------------------------
Name of Bank
By:
----------------------------------
Title:
--------------------------------
Number: REE-1 $2,275,000
California Statewide Communities Development Authority
Multifamily Housing Revenue Bond
(Silvercrest at Clovis Project) Series 1998EE
<TABLE>
<CAPTION>
Initial
Dated Date: Maturity Date: Interest Rate:
----------- -------------- --------------
<S> <C> <C>
September 24, 1998 September 1, 2040 7.125%
</TABLE>
Registered Owner: CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
Principal Amount: TWO MIILLION TWO HUNDRED SEVENTY-FIVE THOUSAND
DOLLARS
California Statewide Communities Development Authority (the
"Issuer"), a joint exercise of powers agency duly organized and existing under
the laws of the State of California (the "State"), for value received hereby
promises to pay to the registered owner hereof stated above, or registered
assigns, at the maturity date stated above, but only from the sources and as
hereinafter provided, upon presentation and surrender of this Bond at the
corporate trust office of U.S. Bank Trust National Association in St. Paul,
Minnesota, as agent for U.S. Bank Trust National Association, San Francisco,
California, or its successor as trustee (the "Trustee"), under the Indenture
(described below), the principal amount stated above, and to pay interest on
said principal amount at the interest rate set forth above, from and including
the date of issuance of this Bond until the principal amount shall have been
paid in accordance with the terms of this Bond and the Indenture, as and when
set forth below, but only from the sources and as hereinafter provided, by wire
transfer if there be one Owner of all of the Bonds or otherwise by check mailed
to the record Owners of Bonds as the same appear upon the books of registry to
be maintained by the Trustee, as registrar.
This Bond is one of a series of bonds (the "Bonds") issued
pursuant to the provisions of Chapter 5 of Division 7 of Title 1 of the
California Government Code, together with the provisions of Chapter 7 of Part
of Division 31 of the California Health and Safety Code, as the same may be
amended (collectively, the "Act"), and a Trust Indenture, dated as of September
1, 1998, between the Issuer and the Trustee (as amended and supplemented from
time to time, the "Indenture"). Reference is made to the Indenture and the Act
for a full statement of their respective terms. Capitalized terms used herein
and not otherwise defined herein have the respective meanings accorded such
terms in the Indenture, which are hereby incorporated herein by reference.
The Bonds issued under the Indenture are expressly limited to $2,275,000 in
aggregate principal amount at any time Outstanding and are all of like tenor,
except as to numbers and denominations, and are issued for the purposes of
providing construction and permanent financing for a qualified multifamily
rental housing development in the State and paying of certain expenses
incidental thereto.
<PAGE>
The Bonds shall be special and limited obligations of the Issuer payable only
from the sources provided in this Indenture and neither the State nor any other
political subdivision thereof shall be liable on the Bonds. Neither the State
nor any political subdivision thereof shall in any event be liable for the
payment of the principal of or interest on any Bonds, or for the performance of
any pledge, deed of trust, obligation or agreement of any kind whatsoever that
may be undertaken by the Issuer, and none of the Bonds or any of its agreements
or obligations shall be construed to constitute a debt or a pledge of the faith
and credit of the State or any political subdivision thereof within the meaning
of any constitutional or statutory provision whatsoever, and shall not directly,
indirectly or contingently obligate the State or any of its political
subdivisions to levy or to pledge any form of taxation whatsoever therefor or to
make an appropriation for the payment thereof; nor shall any breach of any such
pledge, deed of trust, obligation or agreement impose any pecuniary liability
upon any member, officer, employee or agent of the Issuer, or any charge upon
the general credit of the Issuer, or any pecuniary liability upon the Issuer
payable from any moneys, revenues, payments and proceeds other than those first
above specified.
NEITHER THE MEMBERS OF THE ISSUER NOR ANY PERSONS EXECUTING THIS BOND
SHALL BE LIABLE PERSONALLY ON THE BONDS BY REASON OF THE ISSUANCE THEREOF. THE
BONDS SHALL NOT BE A DEBT OF THE STATE OR ANY POLITICAL SUBDIVISION THEREOF
(OTHER THAN THE ISSUER TO THE EXTENT PROVIDED HEREIN, AND NEITHER THE STATE NOR
ANY POLITICAL SUBDIVISION THEREOF (OTHER THAN THE ISSUER) SHALL BE LIABLE
THEREON, NOR IN ANY EVENT SHALL THE BONDS BE PAYABLE OUT OF ANY FUNDS OR
PROPERTIES OTHER THAN THOSE OF THE ISSUER SPECIFICALLY PLEDGED THERETO. THE
BONDS SHALL NOT CONSTITUTE AN INDEBTEDNESS WITHIN THE MEANING OF ANY
CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. THE ISSUER HAS NO
TAXING POWER.
Interest on the Bonds. The Bonds (including this Bond) shall bear
interest on the outstanding principal amount thereof, at a rate of seven and
one-eighth percent (7.125%) per annum, computed on the basis of a 360-day year
comprised of twelve 30-day months from the date of issuance of the Bonds to the
Maturity Date or upon earlier redemption or acceleration thereof.
Limited Recourse. Pursuant to a Loan Agreement dated as of September
1, 1998, and a Promissory Note (the "Note") dated the date of issuance of the
Bonds, Clovis Seniors Limited, a California limited partnership (the
"Developer"), has agreed to make payments to the Issuer in amounts equal to
amounts of principal of and premium, if any, and interest on the Bonds. THE
OBLIGATIONS OF THE ISSUER ON THIS BOND ARE EXPRESSLY LIMITED TO AND ARE PAYABLE
SOLELY FROM (I) THE PAYMENTS MADE PURSUANT TO THE LOAN AGREEMENT AND THE NOTE BY
THE DEVELOPER, AND THE SECURITY THEREFOR PROVIDED BY THE FIRST DEED OF TRUST AND
SECURITY AGREEMENT FROM THE DEVELOPER TO THE BENEFIT OF THE TRUSTEE, TO BE DATED
AS OF SEPTEMBER 1, 1998, ALL OF WHICH HAVE BEEN ASSIGNED TO THE TRUSTEE PURSUANT
TO THE INDENTURE AND (II) ANY ADDITIONAL SECURITY PROVIDED IN THE INDENTURE.
Registration and Transfer. This Bond is transferable by the
registered owner hereof in person or by his attorney duly authorized in writing
at the office of the Trustee as registrar, but only in the manner, subject to
the limitations and upon payment of the charges provided in the Indenture, and
upon surrender and cancellation of this Bond. Upon such transfer a new
registered Bond or Bonds, of any authorized denomination or denominations, of
the same maturity and for the same aggregate principal amount will be issued to
the transferee in exchange herefor. The Bonds are issuable as fully registered
Bonds in Authorized Denominations as provided in the Indenture.
2
<PAGE>
Redemption of Bonds. The Bonds are subject to optional and mandatory
redemption by the Issuer and purchase in lieu of redemption by the Developer
prior to maturity as a whole or in part at such time or times, under such
circumstances, at such redemption prices and in such manner as is set forth in
the Indenture.
Enforcement. Only the Majority Owner shall have the right to enforce
the provisions of this Bond or the Indenture or to institute any action to
enforce the covenants herein or therein, or to take any action with respect to
any Event of Default under the Indenture, or to institute, appear in or defend
any suit or other proceedings with respect thereto, except as provided in the
Indenture. If an Event of Default occurs and is continuing, the principal of all
Bonds then outstanding may be declared due and payable by the Majority Owner
upon the conditions and in the manner and with the effect provided in the
Indenture. As provided in the Indenture, and to the extent permitted by law,
interest and a penalty rate of interest shall be payable on unpaid amounts due
hereon.
Discharge. The Indenture prescribes the manner in which it may be
discharged and after which the Bonds shall be deemed to be paid and no longer be
secured by or entitled to the benefits of the Indenture, except for the purposes
of registration and exchange of Bonds and of such payment.
Modifications. Modifications or alterations of the Indenture, or of
any supplements thereto, may be made only to the extent and in the circumstances
permitted by the Indenture.
This Bond shall not be valid or obligatory for any purpose until it
shall have been signed on behalf of the Issuer and such signature attested, by
the officer, and in the manner, provided in the Indenture, and authenticated by
a duly authorized officer of the Trustee, as Authenticating Agent.
It is hereby certified and recited that all conditions, acts and
things required by the statutes of the State or by the Act or the Indenture to
exist, to have happened or to have been performed precedent to or in the
issuance of this Bond exist, have happened and have been performed and that the
issue of the Bonds, together with all other indebtedness of the Issuer, is
within every debt and other limit prescribed by said statutes.
3
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this Bond to be executed as
of the Dated Date stated above.
CALIFORNIA STATEWIDE COMMUNITIES
DEVELOPMENT AUTHORITY
By:/s/ Gerald P. Burke
------------------------------
Chairman
Attest:
By:/s/ Norma Lammers
------------------------------
Secretary
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the within mentioned Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION, as
Trustee and Authenticating Agent
By:/s/ Thomas M. Demchuk
------------------------------
Authorized Signatory
Date of Authentication: 9/24/98
----------------
4
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
_________ the within Bond and hereby authorizes the transfer of this Bond on the
registration books of the Trustee.
Dated:
------------------
--------------------------------
Authorized Signature
--------------------------------
Name of Transferee
Signature Guaranteed by:
- ---------------------------------------
Name of Bank
By:
------------------------------------
Title:
----------------------------------
5
Number: RDD-1 $3,375,000
California Statewide Communities Development Authority
Multifamily Housing Revenue Bond
(Carrington Pointe Project) Series 1998DD
<TABLE>
<CAPTION>
Initial
Dated Date: Maturity Date: Interest Rate:
----------- -------------- --------------
<S> <C> <C>
September 24, 1998 September 1, 2040 6.375%
</TABLE>
Registered Owner: CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
Principal Amount: THREE MILLION THREE HUNDRED SEVENTY-FIVE THOUSAND
DOLLARS
California Statewide Communities Development Authority (the
"Issuer"), a joint exercise of powers agency duly organized and existing under
the laws of the State of California (the "State"), for value received hereby
promises to pay to the registered owner hereof stated above, or registered
assigns, at the maturity date stated above, but only from the sources and as
hereinafter provided, upon presentation and surrender of this Bond at the
corporate trust office of U.S. Bank Trust National Association in St. Paul,
Minnesota, as agent for U.S. Bank Trust National Association, San Francisco,
California, or its successor as trustee (the "Trustee"), under the Indenture
(described below), the principal amount stated above, and to pay interest on
said principal amount at the interest rate set forth above, from and including
the date of issuance of this Bond until the principal amount shall have been
paid in accordance with the terms of this Bond and the Indenture, as and when
set forth below, but only from the sources and as hereinafter provided, by wire
transfer if there be one Owner of all of the Bonds or otherwise by check mailed
to the record Owners of Bonds as the same appear upon the books of registry to
be maintained by the Trustee, as registrar.
This Bond is one of a series of bonds (the "Bonds") issued
pursuant to the provisions of Chapter 5 of Division 7 of Tide 1 of the
California Government Code, together with the provisions of Chapter 7 of Part 5
of Division 31 of the California Health and Safety Code, as the same may be
amended (collectively, the "Act"), and a Trust Indenture, dated as of September
1, 1998, between the Issuer and the Trustee (as amended and supplemented from
time to time, the "Indenture"). Reference is made to the Indenture and the Act
for a full statement of their respective terms. Capitalized terms used herein
and not otherwise defined herein have the respective meanings accorded such
terms in the Indenture, which are hereby incorporated herein by reference. The
Bonds issued under the Indenture are expressly limited to $3,375,000 in
aggregate principal amount at any time Outstanding and are all of like tenor,
except as to numbers and denominations, and are issued for the purposes of
providing construction and permanent financing for a qualified multifamily
rental housing development in the State and paying of certain expenses
incidental thereto.
<PAGE>
The Bonds shall be special and limited obligations of the Issuer
payable only from the sources provided in this Indenture and neither the State
nor any other political subdivision thereof shall be liable on the Bonds.
Neither the State nor any political subdivision thereof shall in any event be
liable for the payment of the principal of or interest on any Bonds, or for the
performance of any pledge, deed of trust, obligation or agreement of any kind
whatsoever that may be undertaken by the Issuer, and none of the Bonds or any of
its agreements or obligations shall be construed to constitute a debt or a
pledge of the faith and credit of the State or any political subdivision thereof
within the meaning of any constitutional or statutory provision whatsoever, and
shall not directly, indirectly or contingently obligate the State or any of its
political subdivisions to levy or to pledge any form of taxation whatsoever
therefor or to make an appropriation for the payment thereof; nor shall any
breach of any such pledge, deed of trust, obligation or agreement impose any
pecuniary liability upon any member, officer, employee or agent of the Issuer,
or any charge upon the general credit of the Issuer, or any pecuniary liability
upon the Issuer payable from any moneys, revenues, payments and proceeds other
than those first above specified.
NEITHER THE MEMBERS OF THE ISSUER NOR ANY PERSONS EXECUTING THIS BOND
SHALL BE LIABLE PERSONALLY ON THE BONDS BY REASON OF THE ISSUANCE THEREOF. THE
BONDS SHALL NOT BE A DEBT OF THE STATE OR ANY POLITICAL SUBDIVISION THEREOF
(OTHER THAN THE ISSUER TO THE EXTENT PROVIDED HEREIN), AND NEITHER THE STATE
NOR ANY POLITICAL SUBDIVISION THEREOF (OTHER THAN THE ISSUER) SHALL BE LIABLE
THEREON, NOR IN ANY EVENT SHALL THE BONDS BE PAYABLE OUT OF ANY FUNDS OR
PROPERTIES OTHER THAN THOSE OF THE ISSUER SPECIFICALLY PLEDGED THERETO. THE
BONDS SHALL NOT CONSTITUTE AN INDEBTEDNESS WITHIN THE MEANING OF ANY
CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. THE ISSUER HAS NO
TAXING POWER.
Interest on the Bonds. The Bonds (including this Bond) shall bear
interest on the outstanding principal amount thereof, at a rate of six and
three-eighths percent (6.375%) per annum, computed on the basis of a 360-day
year comprised of twelve 30-day months from the date of issuance of the Bonds to
the Maturity Date or upon earlier redemption or acceleration, unless and until
there shall have occurred an Involuntary Retirement, in which event the Bond
shall bear interest at a rate of seven and one-eighth percent (7.125%) per
annum, calculated as aforesaid, of which amount. 75% shall be payable only from
and to the extent of Net Project Revenues. The interest payable on the Bonds as
provided above shall be payable on the first day of each month, commencing
October l, 1998, and on each Bond Payment Date.
Limited Recourse. Pursuant to a Loan Agreement dated as of September
1, 1998, and a Promissory Note (the "Note") dated the date of issuance of the
Bonds, Los Banos Carrington Limited, a California limited partnership (the
"Developer"), has agreed to make payments to the Issuer in amounts equal to
amounts of principal of and premium, if any, and interest on the Bonds. THE
OBLIGATIONS OF THE ISSUER ON THIS BOND ARE EXPRESSLY LIMITED TO AND ARE PAYABLE
SOLELY FROM (I) THE PAYMENTS MADE PURSUANT TO THE LOAN AGREEMENT AND THE NOTE BY
THE DEVELOPER, AND THE SECURITY THEREFOR PROVIDED BY THE FIRST DEED OF TRUST AND
SECURITY AGREEMENT FROM THE DEVELOPER TO THE BENEFIT OF THE TRUSTEE, TO BE DATED
AS OF SEPTEMBER 1, 1998, ALL OF WHICH HAVE BEEN ASSIGNED TO THE TRUSTEE PURSUANT
TO THE INDENTURE AND (II) ANY ADDITIONAL SECURITY PROVIDED IN THE INDENTURE.
2
<PAGE>
Registration and Transfer. This Bond is transferable by the
registered owner hereof in person or by his attorney duly authorized in writing
at the office of the Trustee as registrar, but only in the manner, subject to
the limitations and upon payment of the charges provided in the Indenture, and
upon surrender and cancellation of this Bond. Upon such transfer a new
registered Bond or Bonds, of any authorized denomination or denominations, of
the same maturity and for the same aggregate principal amount will be issued to
the transferee in exchange herefor. The Bonds are issuableas fully registered
Bonds in Authorized Denominations as provided in the Indenture.
Redemption of Bonds. The Bonds are subject to optional and mandatory
redemption by the Issuer and purchase in lieu of redemption by the Developer
prior to maturity as a whole or in part at such time or times, under such
circumstances, at such redemption prices and in such manner as is set forth in
the Indenture.
Enforcement. Only the Majority Owner shall have the right to enforce
the provisions of this Bond or the Indenture or to institute any action to
enforce the covenants herein or therein, or to take any action with respect to
any Event of Default under the Indenture, or to institute, appear in or defend
any suit or other proceedings with respect thereto, except as provided in the
Indenture. If an Event of Default occurs and is continuing, the principal of all
Bonds then outstanding may be declared due and payable by the Majority Owner
upon the conditions and in the manner and with the effect provided in the
Indenture. As provided in the Indenture, and to the extent permitted by law,
interest and a penalty rate of interest shall be payable on unpaid amounts due
hereon.
Discharge. The Indenture prescribes the manner in which it may be
discharged and after which the Bonds shall be deemed to be paid and no longer be
secured by or entitled to the benefits of the Indenture, except for the purposes
of registration and exchange of Bonds and of such payment.
Modifications. Modifications or alterations of the Indenture, or of
any supplements thereto, may be made only to the extent and in the circumstances
permitted by the Indenture.
This Bond shall not be valid or obligatory for any purpose until it
shall have been signed on behalf of the Issuer and such signature attested, by
the officer, and in the manner, provided in the Indenture, and authenticated by
a duly authorized officer of the Trustee, as Authenticating Agent.
It is hereby certified and recited that all conditions, acts and
things required by the statutes of the State or by the Act or the Indenture to
exist, to have happened or to have been performed precedent to or in the
issuance of this Bond exist, have happened and have been performed and that the
issue of the Bonds, together with all other indebtedness of the Issuer, is
within every debt and other limit prescribed by said statutes.
3
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this Bond to be executed as
of the Dated Date stated above.
CALIFORNIA STATEWIDE COMMUNITIES
DEVELOPMENT AUTHORITY
By:/s/ Gerald P. Burke
------------------------------
Chairman
Attest:
By:/s/ Norma Lammers
------------------------------
Secretary
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the within mentioned Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION, as
Trustee and Authenticating Agent
By:/s/ Thomas M. Demchuk
------------------------------
Authorized Signatory
Date of Authentication: 9/24/98
----------------
4
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
____________ the within Bond and hereby authorizes the transfer of this Bond on
the registration books of the Trustee.
Dated:
------------------
--------------------------------
Authorized Signature
--------------------------------
Name of Transferee
Signature Guaranteed by:
- ---------------------------------------
Name of Bank
By:
------------------------------------
Title:
----------------------------------
5
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial information extracted from the financial
statements for Charter Municipal Mortgage Acceptance Company and is qualified in
its entirety by reference to such financial statements
</LEGEND>
<CIK> 0001043325
<NAME> Charter Municipal Mortgage Acceptance Company
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 2,055,565
<SECURITIES> 427,221,442
<RECEIVABLES> 9,107,582
<ALLOWANCES> 452,119
<INVENTORY> 0
<CURRENT-ASSETS> 58,446
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 443,414,623
<CURRENT-LIABILITIES> 6,970,082
<BONDS> 43,440,329
0
0
<COMMON> 0
<OTHER-SE> 332,021,504
<TOTAL-LIABILITY-AND-EQUITY> 443,414,623
<SALES> 0
<TOTAL-REVENUES> 20,181,341
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,920,741
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 978,971
<INCOME-PRETAX> 16,281,629
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,281,629
<EPS-PRIMARY> .73
<EPS-DILUTED> .73
</TABLE>
