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, 1999
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 Trust Agreement)
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 SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
============= =============
September 30, December 31,
1999 1998
------------- -------------
<S> <C> <C>
ASSETS
First mortgage bonds-at fair value $ 569,487,941 $ 458,662,600
Other bond related investments-at fair value 560,000 0
Temporary investments 30,711,000 0
Cash and cash equivalents 8,411,954 13,093,023
Cash and cash equivalents-restricted 870,154 0
Interest receivable, net 2,041,532 1,512,562
Promissory notes receivable 7,772,767 7,628,920
Deferred costs, net 13,034,886 7,005,965
Goodwill, net 2,761,637 4,671,236
Other assets 302,999 11,500
------------- -------------
Total assets $ 635,954,870 $ 492,585,806
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Secured borrowings $ 52,807,000 $ 0
Accounts payable, accrued expenses and
other liabilities 1,501,579 8,993,174
Due to Manager and affiliates 1,369,886 1,159,358
Distributions payable to preferred shareholders
of subsidiary 1,523,750 0
Distributions payable to shareholders 5,042,342 4,939,068
------------- -------------
Total liabilities 62,244,557 15,091,600
------------- -------------
Minority interest in subsidiary
(subject to mandatory redemption) 157,000,000 150,000,000
------------- -------------
Preferred shares of subsidiary (subject to mandatory
repurchase) 90,000,000 0
------------- -------------
Commitments and contingencies
Shareholders' equity:
Beneficial owner's equity-manager 398,205 230,259
Beneficial owners' equity-other shareholders
(50,000,000 shares authorized; 20,589,375 issued
and 20,580,975 outstanding and 20,587,837
shares issued and 20,579,437 outstanding in
1999 and 1998, respectively) 313,930,454 312,307,115
Treasury shares of beneficial interest (8,400 shares) (103,359) (103,359)
Accumulated other comprehensive income 12,485,013 15,060,191
------------- -------------
Total shareholders' equity 326,710,313 327,494,206
------------- -------------
Total liabilities and shareholders' equity $ 635,954,870 $ 492,585,806
============= =============
</TABLE>
See accompanying notes to consolidated financial statements
2
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
============================ ============================
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Interest income:
First mortgage bonds $ 10,155,870 $ 7,128,239 $ 26,742,542 $ 19,580,311
Other bond related
investments 154,877 0 177,255 0
Temporary investments 556,614 57,655 814,611 162,049
Promissory notes 164,792 148,551 496,605 438,981
------------ ------------ ------------ ------------
Total revenues 11,032,153 7,334,445 28,231,013 20,181,341
------------ ------------ ------------ ------------
Expenses:
Interest expense 558,758 305,326 932,236 978,971
Loan servicing and asset
management fees 352,300 255,200 947,156 706,778
General and administrative 754,255 610,091 2,125,893 1,177,972
Amortization 216,051 123,802 546,105 244,792
------------ ------------ ------------ ------------
Total expenses 1,881,364 1,294,419 4,551,390 3,108,513
------------ ------------ ------------ ------------
Income before minority interests 9,150,789 6,040,026 23,679,623 17,072,828
Income allocated to preferred
shareholders of subsidiary (1,490,625) 0 (1,523,750) 0
Minority interest in income of
subsidiary (1,388,095) (534,442) (3,926,045) (791,199)
------------ ------------ ------------ ------------
Net income 6,272,069 5,505,584 18,229,828 16,281,629
Special allocation of net income to
the Manager (597,491) (434,027) (1,602,367) (1,212,381)
------------ ------------ ------------ ------------
Net income applicable to
shareholders $ 5,674,578 $ 5,071,557 $ 16,627,461 $ 15,069,248
============ ============ ============ ============
Net income per share (basic and
diluted) $ .28 $ .25 $ .81 $ .73
============ ============ ============ ============
Weighted average shares
outstanding (basic and
diluted) 20,580,975 20,587,837 20,580,682 20,587,627
============ ============ ============ ============
</TABLE>
See accompanying notes to consolidated financial statements
3
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN
SHAREHOLDERS' EQUITY
(Unaudited)
<TABLE>
<CAPTION>
Beneficial Accumulated
Beneficial Owners' Treasury Other
Owner's Equity- Shares of Compre-
Equity - Other Beneficial Comprehensive hensive
Manager Shareholders Interest Income Income Total
------- ------------ -------- ------ ------ -----
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1999 $ 230,259 $ 312,307,115 $ (103,359) $ 15,060,191 $ 327,494,206
Comprehensive income:
Net income 1,602,367 16,627,461 0 $ 18,229,828 0 18,229,828
-------------
Other comprehensive loss:
Net unrealized loss on first mortgage
bonds and bond related investments:
Net unrealized holding loss arising
during the period (2,600,671)
Add: Reclassification adjustment for
losses included in net income 25,493
-------------
Other comprehensive loss (2,575,178) (2,575,178) (2,575,178)
-------------
Comprehensive income $ 15,654,650
=============
Issuance of shares of beneficial interest 0 20,000 0 0 20,000
Distributions (1,434,421) (15,024,122) 0 0 (16,458,543)
------------ ------------- ------------ ------------- -------------
Balance at September 30, 1999 $ 398,205 $ 313,930,454 $ (103,359) $ 12,485,013 $ 326,710,313
============ ============= ============ ============= =============
</TABLE>
See accompanying notes to consolidated financial statements
4
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
==============================
Nine Months Ended
September 30,
------------------------------
1999 1998
------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 18,229,828 $ 16,281,629
------------- -------------
Adjustments to reconcile net income to net cash
provided by operating activities:
Loss on repayment of first mortgage bond 25,493 0
Amortization 546,105 244,792
Amortization of goodwill 210,613 0
Accretion of excess of acquired net
assets over cost 0 (248,559)
Accretion of deferred income (49,659) (49,659)
Income allocated to preferred shareholders
of subsidiary 1,523,750 0
Changes in operating assets and liabilities:
Interest receivable (528,970) (304,346)
Other assets (39,999) (16,975)
Accounts payable, accrued expenses and
other liabilities (5,762,791) 350,463
Due to Manager and
affiliates 107,986 556,375
------------- -------------
Total adjustments (3,967,472) 532,091
------------- -------------
Net cash provided by operating activities 14,262,356 16,813,720
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from repayment of first mortgage bond 5,100,000 0
Purchase of first mortgage bonds (118,400,500) (77,604,600)
Purchase of other bond related investments (540,178) 0
Increase in deferred bond selection costs (2,735,509) (1,658,160)
Net purchase of temporary investments (30,711,000) (450,000)
Increase in cash and cash equivalents-restricted (870,154) 0
Increase in other assets (251,500) 0
Loans made to property (307,185) (529,972)
Principal payments received from loans made to
properties 163,338 138,639
------------- -------------
Net cash used in investing activities (148,552,688) (80,104,093)
------------- -------------
</TABLE>
(continued)
See accompanying notes to consolidated financial statements
5
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
==============================
Nine Months Ended
September 30,
------------------------------
1999 1998
------------------------------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions paid to Manager and shareholders (16,232,727) (15,213,392)
Proceeds from note payable 0 77,583,230
Repayments of note payable 0 (55,588,241)
Proceeds from secured borrowings 52,807,000 0
Increase in minority interest 7,000,000 58,000,000
Increase in deferred costs relating to the
Private Label Tender Option Program (360,132) (1,717,930)
Issuance of preferred stock of subsidiary 90,000,000 0
Deferred costs relating to the issuance of
preferred stock of subsidiary (3,604,878) 0
Consolidation costs 0 (14,628)
------------- -------------
Net cash provided by financing activities 129,609,263 63,049,039
------------- -------------
Net decrease in cash and
cash equivalents (4,681,069) (241,334)
Cash and cash equivalents at the
beginning of the period 13,093,023 2,296,899
------------- -------------
Cash and cash equivalents at the
end of the period $ 8,411,954 $ 2,055,565
============= =============
SUPPLEMENTAL INFORMATION:
Interest paid $ 746,839 $ 982,508
============= =============
</TABLE>
(continued)
See accompanying notes to consolidated financial statements
6
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
==============================
Nine Months Ended
September 30,
------------------------------
1999 1998
------------------------------
<S> <C> <C>
SUPPLEMENTAL DISCLOSURE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
Issuance of shares of beneficial
interest for trustee fees $ 20,000 $ 5,000
============= =============
Adjustment to goodwill due to the Discounted
Cash Settlement:
Decrease in goodwill $ 1,698,986 $ 0
Decrease in accounts payable, accrued
expenses and other liabilities (1,698,986) 0
------------- -------------
$ 0 $ 0
============= =============
Distributions to Manager and shareholders
of the Company $ (16,458,543) $ (15,265,696)
Increase in special distribution payable
to the Manager 122,542 52,219
Increase in distributions payable to shareholders
of the Company 103,274 85
------------- -------------
Distributions paid to Manager and shareholders $ (16,232,727) $ (15,213,392)
============= =============
</TABLE>
See accompanying notes to consolidated financial statements
7
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(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") 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, 1999 the Company owned a portfolio of 66 FMBs. The Company is
organized and managed as a single business segment.
The Company was formed on October 1, 1997 as the result of the consolidation
(the "Consolidation") of three publicly registered limited partnerships, Summit
Tax Exempt Bond Fund, L.P., Summit Tax Exempt L.P. II and Summit Tax Exempt L.P.
III (the "Partnerships", and each individually a "Partnership"). One of the
general partners of the Partnerships was an affiliate of Related Capital Company
("Related"). 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 their Partnership.
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.
As part of the settlement of class action litigation relating to the
Partnerships, counsel ("Class Counsel") for the partners of the Partnerships had
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 were based upon a percentage (which Class Counsel proposed
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 October 1, 1997. As of October 1,
1998, 25% of the Added Value amounted to $7,788,536 and, in accordance with an
Order and Stipulation of Settlement by the Court on February 18, 1999 (the
"Order"), Class Counsel was entitled to receive 608,955 shares of beneficial
interest in the Company. On April 15, 1999, the Company successfully negotiated
a discounted cash settlement (the "Discounted Cash Settlement") of $6,089,550
with Class Counsel in lieu of the issuance of shares. On April 26, 1999, the
Discounted Cash Settlement was approved by the Board of Trustees and it was paid
on May 3, 1999.
The Company had previously recorded an accrual of $7,788,536 as its liability to
issue Counsel Fee Shares under the Order and adjusted the goodwill recorded in
the Consolidation accordingly. The Discounted Cash Settlement results in a
decrease of $1,698,986 in this liability and in goodwill in 1999.
8
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(Unaudited)
The consolidated financial statements at September 30, 1999 include the accounts
of the Company and four business trusts it controls: CM Holding Trust, Charter
Mac Equity Issuer Trust, Charter Mac Origination Trust I and Charter Mac Owner
Trust I (see Notes 6 and 7). 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, 1999, the results of
its operations for the three and nine months ended September 30, 1999 and 1998
and its cash flows for the nine months ended September 30, 1999 and 1998.
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 ("GAAP") 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 for the year ended
December 31, 1998.
The preparation of financial statements in conformity with GAAP requires the
Manager to make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements as well as the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
The Financial Accounting Standards Board has 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 the Company
beginning with the first quarter of 2001. 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.
Certain amounts in the 1998 financial statements have been reclassified to
conform to the 1999 presentation.
9
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(Unaudited)
NOTE 2 - First Mortgage Bonds ("FMBs")
As of September 30, 1999, the Company and its consolidated subsidiaries owned 66
FMBs (28 participating FMBs and 38 non-participating FMBs). Two of the FMBs are
taxable FMBs acquired in connection with the purchase of tax-exempt FMBs. The
taxable FMBs are secured by the same Underlying Properties which secure the
associated tax-exempt FMBs. The following table provides certain information
with respect to each of the FMBs.
<TABLE>
<CAPTION>
Stated
Closing Interest Face Amount
Property Location Date Rate Call Date Maturity Date of FMB
- -------- -------- -------- -------- --------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Tax-Exempt First Mortgage Bonds
Owned by the Company (not including its consolidated subsidiaries)
Greenbriar (M)(P) Concord, CA 5/6/99 6.875 May 2017 May 2036 $ 9,585,000
Highpointe Club (K)(N) Harrisburg, PA 7/29/86 8.50 June 1998 June 2006 8,900,000
-------------
18,485,000
-------------
Owned by Charter Mac Equity Issuer Trust (H)
Casa Ramon (P) Orange County, CA 6/8/99 7.50% Oct. 2015 Sep. 2035 50,000(Q)
Chapel Ridge of Little Rock Little Rock, AR 8/12/99 7.125 Aug. 2015 Aug. 2039 5,600,000
(O)(S)
Chapel Ridge of Texarkana Texarkana, AR 9/29/99 7.375 Oct. 2016 Sept. 2041 5,800,000
(O)(S)
Del Monte Pines (R)(P) Fresno, CA 5/6/99 6.80 May 2017 May 2036 11,000,000
Douglas Pointe(O)(S) Miami, FL 9/28/99 7.00 Oct. 2026 Sept. 2041 7,100,000
Forest Hills (R)(P) Garner, NC 12/15/98 7.125 June 2016 June 2034 5,930,000
Franciscan Riviera (P) Antioch, CA 8/24/99 7.125 Apr. 2016 Aug. 2036 6,587,500
Garfield Park (P) Washington, DC 8/31/99 7.25 Aug. 2017 Aug. 2031 3,260,000
Hamilton Gardens (R)(P) Hamilton, NJ 3/26/99 (U) Apr. 2015 Mar. 2035 6,400,000
Lake Jackson (R)(O)(S) Lake Jackson, TX 12/22/98 7.00 Jan. 2018 Jan. 2041 10,934,000
Lake Park (P) Turlock, CA 6/8/99 (T) 7.25 Oct. 2015 Sep. 2035 3,638,000
Lakes Edge At Walden (P) Miami, FL 7/1/99 6.90 June 2016 May 2035 14,850,000
Lennox Park (O)(S) Gainesville, GA 7/29/99 6.80 Aug. 2021 July 2041 13,000,000
Lewis Place (O)(S) Gainsville, FL 6/22/99 (I) June 2016 June 2041 4,000,000
Mountain Ranch (R)(O) Austin, TX 12/23/98 7.125 Jan. 2018 Jan. 2041 9,128,000
Players Club (M)(K) Ft. Myers, FL 8/14/87 8.00 Aug. 1999 Aug. 2007 9,700,000
Standiford (P) Modesto, CA 9/20/99 7.125 Apr. 2016 Aug. 2036 9,520,000
Sunset Creek (M)(K)(N) Lancaster, CA 3/25/88 8.50 Mar. 2000 Mar. 2008 8,275,000
Sunset Village (M)(K)(N) Lancaster, CA 3/25/88 8.50 Mar. 2000 Mar. 2008 11,375,000
Suntree (M)(K) Ft. Myers, FL 7/31/87 8.00 Jul. 1999 Jul. 2007 7,500,000
Sycamore Woods (R)(P) Antioch, CA 5/6/99 6.875 May 2017 May 2036 9,415,000
Tallwood (O)(S) Virginia Beach, VA 9/30/99 7.25 Nov. 2017 Oct. 2041 6,205,000
-------------
169,267,500
-------------
<CAPTION>
Fair Value
at September
Property 30, 1999 (A)
- -------- ------------
<S> <C>
Tax-Exempt First Mortgage Bonds
Owned by the Company (not including its consolidated subsidiaries)
Greenbriar (M)(P) $ 9,585,000
Highpointe Club (K)(N) 5,888,000
------------
15,473,000
------------
Owned by Charter Mac Equity Issuer Trust (H)
Casa Ramon (P) 50,000
Chapel Ridge of Little Rock 5,600,000
(O)(S)
Chapel Ridge of Texarkana 5,800,000
(O)(S)
Del Monte Pines (R)(P) 11,000,000
Douglas Pointe(O)(S) 7,100,000
Forest Hills (R)(P) 5,930,000
Franciscan Riviera (P) 6,587,500
Garfield Park (P) 3,260,000
Hamilton Gardens (R)(P) 6,400,000
Lake Jackson (R)(O)(S) 10,934,000
Lake Park (P) 3,638,000
Lakes Edge At Walden (P) 14,850,000
Lennox Park (O)(S) 13,000,000
Lewis Place (O)(S) 4,000,000
Mountain Ranch (R)(O) 9,128,000
Players Club (M)(K) 8,704,000
Standiford (P) 9,520,000
Sunset Creek (M)(K)(N) 6,381,000
Sunset Village (M)(K)(N) 8,771,000
Suntree (M)(K) 7,586,000
Sycamore Woods (R)(P) 9,415,000
Tallwood (O)(S) 6,205,000
-------------
163,859,500
-------------
</TABLE>
10
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARIES
NOTES CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(Unaudited)
NOTE 2 - First Mortgage Bonds ("FMBs") (continued)
<TABLE>
<CAPTION>
Stated
Closing Interest Face Amount
Property Location Date Rate Call Date Maturity Date of FMB
- -------- -------- -------- -------- --------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Owned by Charter Mac Origination Trust I (H)(L)
Bay Club (K) Mt. Pleasant, SC 9/11/86 8.25 Sep. 2000 Sep. 2006 6,400,000
Cedar Creek (K)(N) McKinney, TX 12/29/86 8.50 Dec. 1998 Dec. 2006 8,100,000
Clarendon Hills (K) Hayward, CA 12/08/86 5.52 Dec. 2003 Dec. 2003 17,600,000
Cypress Run (K)(N) Tampa, FL 8/14/86 8.50 Aug. 1998 Aug. 2006 15,402,428
East Ridge (K) Mt. Pleasant, SC 5/20/86 8.25 Mar. 2000 May 2010 8,700,000
Greenway Manor (K)(N) St. Louis, MO 10/09/86 8.50 Oct. 1998 Sept. 2006 12,850,000
The Lakes (K) Kansas City, MO 12/30/86 4.87 Dec. 2006 Dec. 2006 13,650,000
Loveridge (K)(N) Contra Costa, CA 11/13/86 8.00 Nov. 1998 Nov. 2006 8,550,000
The Mansion Independence, MO 5/13/86 7.25 Jan. 2011 April 2025 19,450,000
Martin's Creek (K) Summerville, SC 5/20/86 8.25 Mar. 2000 May 2010 7,300,000
Pelican Cove (K)(N) St Louis, MO 2/27/87 8.00 Feb. 1999 Feb. 2007 18,000,000
Sunset Downs (K)(N) Lancaster, CA 2/11/87 8.00 May 1999 May 2007 15,000,000
Sunset Terrace (K)(N) Lancaster, CA 2/12/87 8.00 Feb. 1999 May 2007 10,350,000
------------
161,352,428
------------
<CAPTION>
Fair Value
at September
Property 30, 1999 (A)
- -------- ------------
<S> <C>
Owned by Charter Mac Origination Trust I (H)(L)
Bay Club (K) 7,422,841
Cedar Creek (K)(N) 9,653,000
Clarendon Hills (K) 13,880,000
Cypress Run (K)(N) 13,067,000
East Ridge (K) 10,063,000
Greenway Manor (K)(N) 15,313,000
The Lakes (K) 10,024,000
Loveridge (K)(N) 6,593,000
The Mansion 20,084,000
Martin's Creek (K) 8,443,000
Pelican Cove (K)(N) 20,189,000
Sunset Downs (K)(N) 11,566,000
Sunset Terrace (K)(N) 7,981,000
-------------
154,278,841
-------------
</TABLE>
11
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARIES
NOTES CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(Unaudited)
NOTE 2 - First Mortgage Bonds ("FMBs") (continued)
<TABLE>
<CAPTION>
Stated
Closing Interest Face Amount
Property Location Date Rate Call Date Maturity Date of FMB
- -------- -------- -------- -------- --------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Owned by Charter Mac Owner Trust I (J) (H)
Bedford Square (P) Clovis, CA 8/25/98 (D) Sep. 2017 Aug. 2040 3,850,000
Bristol Village Bloomington, MN 7/31/87 7.50 Jan. 2010 Dec. 2027 17,000,000
Carrington Pointe (O)(S) Los Banos, CA 9/24/98 6.375 Oct. 2017 Sep. 2040 3,375,000
Cedarbrook Hanford, CA 4/28/98 7.125 May 2017 May 2040 2,840,000
Cedar Pointe (K) Nashville, TN 4/22/87 7.00 Apr. 2006 Apr. 2017 9,500,000
College Park (O)(S) Naples, FL 7/15/98 (C) Jul. 2025 Jul. 2040 10,100,000
Crowne Pointe (K) Olympia, WA 12/31/86 7.25 Dec. 1998 Aug. 2029 5,075,000
Falcon Creek (O)(S) Indianapolis, IN 9/14/98 (F) Sep. 2016 Aug. 2038 6,144,600
Gulfstream (P) Dania, FL 7/22/98 7.25 Apr. 2016 Jul. 2038 3,500,000
Highland Ridge (K) St. Paul, MN 2/02/87 7.25 June 2010 June 2018 15,000,000
Jubilee Courtyards (O)(S) Florida City, FL 9/15/98 (G) Oct. 2025 Sep. 2040 4,150,000
Lakepoint (K) Dekalb City, GA 11/18/87 6.00 Jul. 2005 June 2017 15,100,000
Madalyn Landing (O)(S) Palm Bay, FL 11/13/98 7.00 Dec. 2017 Nov. 2040 14,000,000
Marsh Landings (P)(S) Portsmouth, VA 5/20/98 7.25 Jul. 2017 Jul. 2030 6,050,000
Newport Village (K) Tacoma, WA 2/11/87 7.25 Jan. 1999 Aug. 2029 13,000,000
North Glen (K) Atlanta, GA 9/30/86 7.00 Jul. 2005 June 2017 12,400,000
Northpointe Village (P) Fresno, CA 8/25/98 (E) Sep. 2017 Aug. 2040 13,250,000
Ocean Air (P)(S) Norfolk, VA 4/20/98 7.25 Jan. 2016 Nov. 2030 10,000,000
Orchard Hills (K) Tacoma, WA 12/31/86 7.25 Dec. 1998 Aug. 2029 5,650,000
Orchard Mill (K) Atlanta, GA 12/31/86 7.50 Jul. 2005 June 2017 10,500,000
Phoenix (O)(S) Stockton, CA 4/28/98 7.125 Nov. 2016 Oct. 2029 3,250,000
River Run (K) Miami, FL 8/7/87 8.00 Aug. 1999 Aug. 2007 7,200,000
Shannon Lake (K) Atlanta, GA 6/26/87 (B) Jul. 2005 June 2017 12,000,000
Silvercrest Clovis, CA 9/24/98 7.125 Oct. 2017 Sep. 2040 2,275,000
Stone Creek (O)(S) Watsonville, CA 4/28/98 7.125 May 2017 Apr. 2040 8,820,000
Thomas Lake Eagan, MN 9/02/86 7.50 Jan. 2010 Dec. 2027 12,975,000
Willow Creek (K) Ames, IA 2/27/87 7.25 Jan. 2010 June 2022 6,100,000
-------------
233,104,600
-------------
Subtotal - Tax-Exempt First Mortgage Bonds 582,209,528
-------------
<CAPTION>
Fair Value
at September
Property 30, 1999 (A)
- -------- ------------
<S> <C>
Owned by Charter Mac
Owner Trust I (J) (H)
Bedford Square (P) 3,850,000
Bristol Village 17,875,000
Carrington Pointe (O)(S) 3,375,000
Cedarbrook 2,840,000
Cedar Pointe (K) 9,323,000
College Park (O)(S) 10,100,000
Crowne Pointe (K) 5,158,000
Falcon Creek (O)(S) 6,144,600
Gulfstream (P) 3,500,000
Highland Ridge (K) 15,247,000
Jubilee Courtyards (O)(S) 4,150,000
Lakepoint (K) 12,702,000
Madalyn Landing (O)(S) 14,000,000
Marsh Landings (P)(S) 6,050,000
Newport Village (K) 13,214,000
North Glen (K) 12,914,000
Northpointe Village (P) 13,250,000
Ocean Air (P)(S) 10,000,000
Orchard Hills (K) 5,743,000
Orchard Mill (K) 10,252,000
Phoenix (O)(S) 3,250,000
River Run (K) 8,075,000
Shannon Lake (K) 11,536,000
Silvercrest 2,275,000
Stone Creek (O)(S) 8,820,000
Thomas Lake 13,643,000
Willow Creek (K) 6,200,000
-------------
233,486,600
-------------
Subtotal - Tax-Exempt First Mortgage Bonds 567,097,941
-------------
</TABLE>
12
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARIES
NOTES CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(Unaudited)
NOTE 2 - First Mortgage Bonds ("FMBs") (continued)
<TABLE>
<CAPTION>
Stated
Closing Interest Face Amount
Property Location Date Rate Call Date Maturity Date of FMB
- -------- -------- -------- -------- --------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Taxable First Mortgage Bonds
Owned by the Company (not including its consolidated subsidiaries)
Greenbriar (P) Concord, CA 5/6/99 9.00% May 2017 May 2036 2,015,000
Lake Park (P) Turlock, CA 7/15/99 9.00 Oct. 2015 Sep. 2035 375,000
-------------
Subtotal - Taxable First Mortgage Bonds 2,390,000
-------------
Total First Mortgage Bonds $ 584,599,528
=============
<CAPTION>
Fair Value
at September
Property 30, 1999 (A)
- -------- ------------
<S> <C>
Taxable First Mortgage Bonds
Owned by the Company (not
including its consolidated
subsidiaries)
Greenbriar (P) 2,015,000
Lake Park (P) 375,000
-------------
Subtotal - Taxable First Mortgage Bonds 2,390,000
-------------
Total First Mortgage Bonds $ 569,487,941
=============
</TABLE>
(A) The FMBs are deemed to be available-for-sale debt securities and,
accordingly, are carried at their estimated fair values at September 30,
1999.
(B) Pursuant to a bond modification as of October 1, 1997, the base interest
rate was lowered to 6% through July 31, 2000 and 7% thereafter.
(C) The interest rates for College Park are 7% during the construction period
and 7.25% thereafter.
(D) The interest rates for Bedford Square are 7% during the construction
period and 6.375% thereafter.
(E) 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.
(F) The interest rates for Falcon Creek are 7% through August 31, 2000 and
7.25% thereafter.
(G) The interest rates for Jubilee Courtyards are 7% through September 30,
2000 and 7.125% thereafter.
(H) This entity is a consolidated subsidiary of the Company (see Notes 6 and
7).
(I) The interest rates for Lewis Place are 6.75% through May 31, 2001 and
7.00% thereafter.
(J) These FMBs have been transferred to Charter Mac Owner Trust I in
connection with the Company's Private Label Tender Option Program (TOP)
(see Note 6).
(K) These FMBs are participating FMBs which contain additional interest
features contingent on available cash flow.
(L) The FMBs are held as collateral in connection with the TOP (see Note 6).
(M) These FMBs were pledged as collateral at June 30, 1999 in connection with
the Merrill Lynch RITES/P-FLOATS Program (see Note 3).
(N) The original owners of the Underlying Properties and the obligors of these
FMBs have been replaced with affiliates of the Manager.
(O) The Underlying Property is under construction. In the event construction
is not completed in a timely manner, the owner of the FMB may "put" the
FMB to the construction lender at par.
(P) The Underlying Property is undergoing substantial rehabilitation. In the
event rehabilitation is not completed in a timely manner, the owner of the
FMB may "put" the FMB to the construction lender at par.
(Q) Initial advance on an FMB which will have a face amount of $4,744,000 when
it is fully funded. The balance of $4,694,000 is expected to be funded in
January 2000.
(R) Held by Merrill Lynch as collateral for secured borrowings (see Note 3).
(S) All of the "puts" (see (O) and (P) above) are secured by a letter of
credit issued by the construction lender to the Company.
(T) Initial advance in the amount of $50,000 was funded on June 8, 1999. The
balance was funded on July 15, 1999.
(U) The interest rates for Hamilton Gardens are 7.625% during the construction
period and 7.125% thereafter.
13
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(Unaudited)
NOTE 2 - First Mortgage Bonds ("FMBs") (continued)
The weighted average interest rates recognized on the face amount of the
portfolio of FMBs for the three and nine months ended September 30, 1999 and
1998 were 7.39% and 7.04% and 7.04% and 6.91%, respectively, based on weighted
average face amounts of approximately $549,704,072 and $404,990,777 and
$506,636,405 and $377,983,629, respectively.
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, the FMBs are carried at their estimated fair values,
with unrealized gains and losses reported in other comprehensive income.
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, 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.
The original obligors and owners of the Underlying Properties of the Cedar
Creek, Cypress Run, Highpointe, Greenway Manor, Sunset Terrace, Pelican Cove,
Loveridge, Sunset Downs, Sunset Creek and Sunset Village 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. Buyers are being sought who would make equity investments
in the Underlying Properties and assume the nonrecourse obligations for the FMB.
These properties are generally paying as interest an amount equal to the net
cash flow generated by operations, which in some cases is less than the stated
rate of the FMB. The Company has no present intention of declaring a default on
these FMBs. The aggregate carrying value of these 10 FMBs at September 30, 1999
and December 31, 1998 was approximately $105,402,000 and the income earned from
them for the three and nine months ended September 30, 1999 and 1998 was
approximately $1,884,000 and $1,896,000 and $5,528,000 and $5,421,000,
respectively.
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, 1999.
Effective September 8, 1999, the Crowne Pointe, Orchard Hills and Newport
Village FMBs were modified to reflect: (i) a change in stated interest rate
(from 8.0% to 7.25%); (ii) allow for a por-
14
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(Unaudited)
tion of deferred base (Newport) and other accrued interest through August 1999
to be paid at maturity or upon a sale or refinancing; and (iii) extend the
maturity (to 2029) mandatory redemption (to 2011) and prepayment lock-out dates
(to 2006). The contingent interest feature of the bonds was also modified.
Although these modifications reduced the estimated fair value of the FMBs by
approximately $2,495,000 each FMB's estimated fair value continues to exceed its
amortized cost basis. The Company currently anticipates that it will modify
other FMBs from time to time to generally reflect similar terms as those
modified previously, 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 a change in 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, 28 of the FMBs provide for
"contingent interest". During the nine months ended September 30, 1999 and 1998,
five and six FMBs paid contingent interest amounting to approximately $595,000
and $541,000, respectively.
With respect to the FMBs which are subject to forbearance agreements with the
respective obligors, 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 $1,859,000 and $2,333,000 for the nine months ended September 30,
1999 and 1998, 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, 1999, the face amount of such advances was
$12,963,651, and their carrying value was $7,772,767, which is net of purchase
accounting adjustments, and a reserve for collectibility of $138,000.
On January 4, 1999, the obligor of the Countryside North FMB (the "Countryside
North Obligor") completed a refinancing with an unaffiliated third party. The
Countryside North Obligor then fully repaid its outstanding debt due to the
Company totaling $5,135,417 including the FMB in the amount of $5,000,000, a
$100,000 prepayment penalty and accrued interest due through the repayment date
of $35,417 resulting in a loss on the repayment (including the prepayment
penalty and the write off of bond selection fees and expenses) in the amount of
$25,493 which is included in general and administrative expenses.
15
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(Unaudited)
The amortized cost basis of the Company's portfolio of 66 FMBs at September 30,
1999 and 49 FMBs at December 31, 1998 was $557,022,750 and $443,602,409,
respectively. The net unrealized gain on FMBs in the amount of $12,465,191 at
September 30, 1999 consisted of gross unrealized gains and losses of $19,661,064
and $7,195,873, respectively. The net unrealized gain on FMBs in the amount of
$15,060,191 at December 31, 1998 consisted of gross unrealized gains and losses
of $22,256,064 and $7,195,873, respectively.
NOTE 3 - Securitization Transactions
To raise additional capital to acquire additional FMBs, the Company has
securitized certain FMBs through the Merrill Lynch Pierce Fenner & Smith
Incorporated ("Merrill Lynch") P-FLOATS/RITES program. Under this program, the
Company transfers certain FMBs to Merrill Lynch. Merrill Lynch then deposits
each FMB into an individual special purpose trust created to hold such asset,
together with a Credit Enhancement Guarantee ("Guarantee"). Two types of
securities are then issued by each trust, evidencing ownership in the FMBs and
the Guarantee: (1) Puttable Floating Option Tax-Exempt Receipts ("P-FLOATS"), a
short-term senior security which bears interest at a floating rate that is reset
weekly by the Remarketing Agent, Merrill Lynch, to result in the sale of the
P-FLOAT security at par (up to 99% of the underlying face amount of the FMB);
and (2) Residual Interest Tax Exempt Securities ("RITES), a subordinate security
which receives the residual interest payment after payment of P-FLOAT interest
and ongoing transaction fees. The P-FLOATS are sold to qualified third party,
tax-exempt investors and the RITES are sold back to the Company. The Company has
the right, with 14 days notice to the trustee, to purchase the outstanding
P-FLOATS and withdraw the underlying FMBs from the trust. When the FMBs are
deposited into the P-FLOAT Trust, the Company receives the proceeds from the
sale of the P-FLOATS less certain transaction costs. In certain other cases,
Merrill Lynch may directly buy the FMBs from local issuers, deposit them in the
trust, sell the P-FLOAT security to qualified investors and then the RITES to
the Company.
For financial reporting purposes, due to the repurchase right, the Company
accounts for the net proceeds received upon the transfer of its FMBs to Merrill
Lynch through the P-FLOATS/RITES program as secured borrowings and, accordingly,
continues to account for the FMBs as its assets in the accompanying consolidated
balance sheets. When Merrill Lynch purchases FMBs directly and sells the RITES
to the Company, such RITES are classified as other bond related investments in
the accompanying consolidated balance sheets (See Note 4).
In order to facilitate the securitization, the Company has pledged certain
additional FMBs, cash and cash equivalents and temporary investments as
collateral for the benefit of the credit enhancer or liquidity provider. At
September 30, 1999, the total carrying amount of such additional FMBs, cash and
cash equivalents and temporary investments pledged as collateral was
$41,027,000, $870,154 and $29,211,000, respectively.
During May and June 1999, the Company transferred six FMBs with an aggregate
face amount of $52,807,000 to Merrill Lynch through the Merrill Lynch
P-FLOATS/RITES program and received proceeds of $52,807,000.
During June 1999, Merrill Lynch purchased three FMBs with an aggregate face
amount of $22,430,000. The FMBs were placed into a trust by Merrill Lynch
whereby P-FLOATS and
16
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(Unaudited)
RITES were sold. The Company purchased the related RITES interests with an
aggregate face amount of $15,000 for an aggregate purchase price of $540,178
which includes bond selection fees and other transaction costs.
NOTE 4 - Other Bond Related Investments
The Company's other bond related investments consist of investment in RITES (see
Note 3). The Company accounts for its investments in RITES as available-for-sale
debt securities under the provisions of SFAS 115. Accordingly, the RITES are
carried at their estimated fair values, with unrealized gains and losses
reported in other comprehensive income, while other than temporary impairments
are recorded in operations. Interest income is recognized as it accrues. The
fair value of the RITES, which have a limited market, is estimated by
management, utilizing quotes from external sources, such as brokers, for these
or similar investments, as necessary. The following table provides certain
information with respect to each of the RITES.
<TABLE>
<CAPTION>
Face
Amount Amortized Fair
of RITES Cost Basis at Value at
FMB Date Face Amount Interest September September
Description/Location Purchased of FMB Purchased 30, 1999 30, 1999
- -------------------- --------- ------------ --------- ------------- ---------
<S> <C> <C> <C> <C> <C>
Owned by the Company (not including its consolidated subsidiaries)
RITES-Avalon Court/
Oakley, CA 6/17/99 $ 8,240,000 $ 5,000 $197,616 $200,000
RITES-Meadowview Park/
Santa Rosa, CA 6/17/99 6,250,000 5,000 151,846 160,000
RITES-The Courtyards/
Santa Rosa, CA 6/17/99 7,940,000 5,000 190,716 200,000
------------ ------- -------- --------
$ 22,430,000 $15,000 $540,178 $560,000
============ ======= ======== ========
</TABLE>
17
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(Unaudited)
NOTE 5 - Deferred Costs
The components of deferred costs are as follows:
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------- ------------
<S> <C> <C>
Deferred bond selection costs $ 8,957,115 $ 6,355,252
Deferred costs relating to the Private Label Tender
Option Program 3,415,127 3,054,995
Deferred costs relating to the issuance of preferred
shares of subsidiary 3,604,878 0
------------- ------------
15,977,120 9,410,247
Less: Accumulated amortization (2,942,234) (2,404,282)
------------- ------------
$ 13,034,886 $ 7,005,965
============= ============
</TABLE>
NOTE 6 - 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 to acquire additional FMBs. As of
March 31, 1999, the maximum amount of capital which could be raised under the
TOP ($150,000,000) had been raised. In April 1999, the Company successfully
negotiated an increase in its TOP to $200,000,000. As of September 30, 1999, the
Company has contributed 40 issues of FMBs in the aggregate principal amount of
approximately $394,457,000 to Charter Mac Origination Trust I (the "Origination
Trust"), a wholly-owned, indirect subsidiary of the Company, which has
contributed 27 of those FMBs, with an aggregate principal amount of
approximately $233,105,000, to Charter Mac Owner Trust I (the "Owner Trust").
The Owner Trust has issued two equity certificates: (i) a Senior Certificate,
with an outstanding face amount of $157,000,000 at September 30, 1999, which has
been 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 (ii) a Residual Certificate
representing the remaining beneficial ownership interest in the Owner Trust,
which has been issued to the Origination Trust. The FMBs remaining in the
Origination Trust (aggregate principal amount of approximately $161,352,000) are
a collateral pool for the Owner Trust's obligations under the Senior
Certificate. In addition, the Owner Trust obtained a municipal bond insurance
policy from MBIA to credit enhance Certificate distributions for the benefit of
the holders of the Floater Certificates and has also arranged for a liquidity
facility, issued by a consortium of highly rated European banks, with respect to
the Floater Certificates.
The effect of the TOP structure is that a portion of the interest received by
the Owner Trust on the FMBs it holds 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., at the distribution
amount that is required to enable the remarketing agent to sell the Floater
Certificates at par on any weekly determination date, with the residual interest
remitted to the Origination Trust via the Residual Certificate.
18
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(Unaudited)
For financial accounting and reporting purposes, the equity in the Owner Trust
represented by the Senior Certificate is classified as "minority interest in
subsidiary (subject to mandatory redemption)" in the accompanying consolidated
balance sheets. Income earned by the Owner Trust is allocated to the minority
interest in an amount equal to the distributions through the Senior Certificate
to the holders of the Floater Certificates. Such 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 to the Owner Trust.
The Company's cost of funds relating to the TOP (calculated as income allocated
to the minority interest plus current fees as a percentage of the weighted
average amount of the outstanding Senior Certificate) was approximately 4.3% for
the period January 1, 1999 through September 30, 1999.
NOTE 7 - Preferred Shares of Subsidiary
On June 29, 1999 a subsidiary of the Company completed a $90 million tax exempt
preferred equity offering (the "Preferred Offering") comprising 45 shares
("Series A Cumulative Preferred Shares") which were purchased by Merrill Lynch,
Legg Mason Wood Walker, Inc. and McDonald Investments, Inc. (the "Initial
Purchasers"). The Initial Purchasers then sold the Series A Cumulative Preferred
Shares to qualified institutional investors.
In connection with this transaction, the Company caused 100% of the ownership of
the Origination Trust to be transferred to Charter Mac Equity Issuer Trust (the
"Issuer"), a newly formed Delaware business trust and an indirectly owned
subsidiary in which the Company owns 100% of the common equity. The Issuer then
issued the Series A Cumulative Preferred Shares. As a result of such
transaction, the Issuer became the direct and indirect owner of the entire
outstanding issue of 40 FMBs held by the Origination Trust and Owner Trust, its
two directly and indirectly-owned subsidiaries (see Note 6). In addition to
contributing the ownership of the Origination Trust, the Company also
contributed eight FMBs to the Issuer. As of the closing, the aggregate par value
of FMBs held directly or indirectly by the Issuer or its subsidiaries was
$463,699,028. Net proceeds of approximately $86,400,000 from the Preferred
Offering have been and are being used to acquire and originate additional tax
exempt assets for the Issuer. In the future, other FMBs, RITES or other directly
or indirectly owned investments of the Company or its subsidiaries may be
contributed to the Issuer.
The Series A Cumulative Preferred Shares have an annual preferred dividend rate
of 6 5/8% through June 30, 2009, payable quarterly in arrears on January 31,
April 30, July 31 and October 31 of each year, commencing October 31, 1999 and
payable upon declaration thereof by the Issuer's Board of Trustees, but only to
the extent of the Issuer's tax-exempt income (net of expenses) for the
particular quarter ("Quarterly Net Income"). The Series A Cumulative Preferred
Shares are subject to mandatory tender by the holders thereof for remarketing
and purchase on June 30, 2009 and each remarketing date thereafter at a price
equal to the $2,000,000 per share plus, to the extent of the Issuer's Quarterly
Net Income, an amount equal to all distributions accrued but unpaid on the
Series A Cumulative Preferred Shares.
19
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(Unaudited)
Holders of the Series A Cumulative Preferred Shares may elect to retain their
shares upon a remarketing, with a distribution rate to be determined immediately
prior to the remarketing date by the remarketing agent. Each holder of the
Series A Cumulative Preferred Shares will be required to tender its shares to
the Issuer for mandatory repurchase on June 30, 2049, unless the Issuer decides
to remarket the shares on such date. The Issuer may not redeem the Series A
Cumulative Preferred Shares before June 30, 2009. After that date, all or a
portion of the shares may be redeemed, subject to certain conditions. The Series
A Cumulative Preferred Shares are not convertible into common Shares of the
Issuer or the Company.
The Series A Cumulative Preferred Shares rank, with respect to payment of
distributions and amounts upon liquidation, dissolution or winding-up of the
Issuer, senior to all classes or series of common shares of the Issuer and
therefore, of the Company.
For financial accounting and reporting purposes, the Series A Cumulative
Preferred Shares are classified as "Preferred shares of subsidiary (subject to
mandatory repurchase)" in the accompanying consolidated balance sheets. Net
income earned by the Issuer and its two subsidiaries is allocated to the holders
of the Series A Cumulative Preferred Shares in an amount equal to the
distributions to such holders. Such allocation of income is classified as
"Income allocated to preferred shareholders of subsidiary" in the accompanying
consolidated statements of income. Deferred costs relating to the issuance of
the Series A Cumulative Preferred Shares are included in "Deferred Costs" (see
Note 5) and are being amortized using the straight line method over 50 years
which is the term to the mandatory repurchase in 2049.
NOTE 8 - Capital Shares
Each independent trustee is entitled to receive annual 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 valued based on the fair market value at the date
of issuance. As of September 30, 1999 and December 31, 1998, 955 and 186 Shares,
respectively, having an aggregate value of $12,500 and $2,500, respectively,
have been issued to each independent trustee as compensation for their services.
NOTE 9 - Related Party Transactions
Pursuant to the Management Agreement, the Manager receives (inclusive of fees
paid directly to the Manager by subsidiaries of the Company) (i) bond selection
fees equal to 2% of the principal amount of each FMB or other instrument
acquired or originated by the Company; (ii) special distributions equal to .375%
of the total invested assets of the Company; (iii) loan servicing fees equal to
.25% of the outstanding principal amount of FMBs held by the Company (not
including its consolidated subsidiaries) and .15% of the outstanding principal
amount of FMBs held by the consolidated subsidiaries of the Company; (iv)
management fees equal to .10% of the total invested assets of the consolidated
subsidiaries of the Company; (v) 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 (vi) reimbursement of certain administrative costs
incurred by the Manager and its affiliates on behalf of the Company. Fees
payable to the Manager which are based on FMBs or assets of the Company include
such FMBs or assets which are either held directly by the Company or held by
other entities to whom the Company has trans-
20
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(Unaudited)
ferred such FMBs or assets to facilitate financing. In addition, the Manager
receives bond placement fees from the borrower in an amount equal to 1% to 1.5%
of the principal amount of each FMB or other 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 five FMBs.
The costs, expenses and the special distributions incurred to the Manager and
its affiliates for the three and nine months ended September 30, 1999 and 1998
were as follows:
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- -----------------------
1999 1998 1999 1998
---------- ---------- ---------- ----------
Bond selection fees $1,518,710 $ 932,892 $2,817,610 $1,552,092
Expense reimbursement 92,823 94,000 260,873 256,734
Loan servicing fees 218,938 218,746 618,225 654,079
Management fees 133,362 36,454 328,931 52,699
Special distribution 540,172 382,799 1,434,413 1,060,166
---------- ---------- ---------- ----------
$2,504,005 $1,664,891 $5,460,052 $3,575,770
========== ========== ========== ==========
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, Carrington Pointe,
Madalyn Landing, Forest Hills, Lake Jackson, Mountain Ranch, Hamilton Garden,
Del Monte Pines, Greenbriar, Sycamore Woods, Avalon Court, The Courtyards,
Meadowview Park, Casa Ramon, Lake Park, Lewis Place, Lennox Park, Chapel Ridge
of Little Rock, Franciscan Riviera, Standiford, Douglas Pointe, Chapel Ridge of
Texarkana and Tallwood FMBs are local partnerships in which investment
partnerships, whose general partners are affiliates of the Manager, own a
controlling partnership interest. With respect to three of the above FMBs, the
Company owns the RITES (see Note 4).
As of September 30, 1999, 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 sought who would make
equity investments in the Underlying Properties and assume the nonrecourse
obligations for the FMB or otherwise buy the property and payoff all or most of
the FMB obligation.
NOTE 10 - Earnings Per Share
Basic net income per Share in the amount of $.28 and $.25 and $.81 and $.73 for
the three and nine months ended September 30, 1999 and 1998, respectively,
equals net income for the periods ($6,272,069 and $5,505,584 and $18,229,828 and
$16,281,629, respectively), less the special allocations to the Manager
($597,491 and $434,027 and $1,602,367 and $1,212,381, respectively),
21
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(Unaudited)
divided by the weighted average number of Shares outstanding for the periods
(20,580,975 and 20,587,837 and 20,580,682 and 20,587,627, respectively).
As the Company had no contingently-issuable Shares or potentially dilutive
securities outstanding at September 30, 1999 and 1998, diluted net income per
share is the same as basic net income per share.
NOTE 11 - Commitments and Contingencies
On November 2, 1999, the Company and American Tax Exempt Bond Trust ("ATEBT"),
whose manager is an affiliate of the Manager of the Company, entered into a
merger agreement pursuant to which ATEBT would merge with and into CM Holding
Trust, a wholly-owned subsidiary of the Company. Following the merger, CM
Holding Trust would continue to be a wholly-owned subsidiary of the Company.
ATEBT is a Delaware business trust which owns four tax-exempt first mortgage
bonds and had total assets of approximately $27,572,000 and net assets of
approximately $26,721,000 at September 30, 1999. The four tax-exempt first
mortgage bonds have an aggregate outstanding loan balance of $23,775,000 at
September 30, 1999, have interest rates of 9% and have underlying properties
located in four different states.
Under the terms of the merger agreement, each share of beneficial ownership in
ATEBT outstanding on the effective date of the proposed merger (1,466,770 shares
at September 30, 1999) will be converted into the right to receive 1.43112
Shares of the Company. In addition, the manager of ATEBT (which owns a 1%
interest in ATEBT not currently represented by ATEBT shares) will receive 21,156
shares of the Company. Following the merger, current ATEBT shareholders will own
approximately 9.3% of the outstanding Shares of the Company.
Consummation of the merger is subject to several conditions, including, without
limitation, approval by ATEBT shareholders. In addition, either entity has the
ability to opt out of the transaction if the 30-day average trading price of the
Company's Shares preceding the closing of the transaction is outside of the
Company's historical trading range of $11.13 to $14.50. Subject to ATEBT
shareholder approval, the Company and ATEBT expect that this transaction will
close during the first quarter of 2000.
The obligor of the Suntree and Players Club FMBs has entered into a contract to
sell the underlying properties to an independent third party. Such sale is
anticipated to occur prior to year end and will result in the redemption of the
FMBs and repayment of mortgage loans securing the bonds. Net proceeds from the
bond redemptions are currently being negotiated but are not anticipated to be
less than the carrying amounts of the FMBs. This sale will also extinguish
promissory note obligations for Players Club and Suntree of approximately
$472,000 and $130,000, respectively.
22
<PAGE>
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(Unaudited)
NOTE 12 - Subsequent Events
During the period October 1, 1999 through November 12, 1999 the Company acquired
two FMBs for a purchase price of $7,655,000, not including bond selection fees
and expenses of approximately $167,000. One of the FMBs is a taxable FMB
acquired in connection with the purchase of a tax-exempt FMB. The taxable FMB is
secured by the same Underlying Property which secures the associated tax-exempt
FMB. Further information regarding the FMBs is as follows:
Stated Face No. of
Closing Interest Call Date/ Amount Rental
Property/Location Date Rate Maturity Date of FMB Units
- ----------------- ---- ---- ------------- ------ -----
Tax-Exempt First Mortgage Bonds
Owned by Charter Mac Equity Issuer Trust
Country Lake 11/10/99 6.0% 7/1/00 $6,255,000 192
/West Palm Beach, FL 7/1/00
Taxable First Mortgage Bonds
Owned by the Company (not including its consolidated subsidiaries)
Lakes Edge at Walden 10/7/99 11.0% 6/1/00 $1,400,000 400
/Miami, FL 8/1/10
On November 10, 1999, the Company made a taxable loan in the amount of
$2,540,000 to the obligor of the Country Lake tax-exempt FMB. The taxable loan
is secured by the same Underlying Property which secures the associated
tax-exempt FMB. The loan bears interest at 13.0% and has a call date and
maturity date of July 1, 2000 and June 1, 2027, respectively.
23
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
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") 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, 1999, the Company owned 66 FMBs and had net assets of
approximately $326,710,000.
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"). One of the
general partners of the Partnerships was an affiliate of Related Capital Company
("Related").
In order to generate increased tax exempt income and, as a result, enhance the
value of the Company's Shares, 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 50% 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 is positioned to market its Direct Purchase Program as a result of
the Manager's affiliation with Related. Related and its predecessor companies
have specialized in offering debt and equity products to mid-market multifamily
owners and developers for over 25 years. Related has provided debt and equity
financing to properties valued at over $7.8 billion. In addition, since 1987
Related has been one of the nation's leading providers of equity to developers
of multifamily housing which benefit from tax credits. The Manager's affiliation
with Related has allowed it to become one of the dominant lenders to developers
and owners of affordable housing financed with tax-exempt bonds.
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 did not experience the ill effects
associated with the volatile interest rate environment during 1998.
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 of the
24
<PAGE>
date incurred. Mortgage REITs typically incur leverage at ratios ranging from
between 3:1 to 10:1.
Due to the Company's low level of leverage, the Company has not been affected by
the recent lack of liquidity that recently impaired mortgage REITs and its
portfolio does not contain assets that are especially vulnerable to volatility
during periods of interest rate fluctuations. 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.
On May 21, 1998, the Company closed on its Private Label Tender Option Program
("TOP") in order to raise additional capital to acquire additional FMBs. As of
March 31, 1999, the maximum amount of capital which could be raised under the
TOP ($150,000,000) had been raised. In April 1999, the Company successfully
negotiated an increase in its TOP to $200,000,000. As of September 30, 1999, the
Company has contributed 40 issues of FMBs in the aggregate principal amount of
approximately $394,457,000 to Charter Mac Origination Trust I (the "Origination
Trust"), a wholly-owned, indirect subsidiary of the Company, which has
contributed 27 of those FMBs, with an aggregate principal amount of
approximately $233,105,000, to Charter Mac Owner Trust I (the "Owner Trust").
The Owner Trust has issued two equity certificates: (i) a Senior Certificate,
with an outstanding face amount of $157,000,000 at September 30, 1999, which has
been 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 (ii) a Residual Certificate
representing the remaining beneficial ownership interest in the Owner Trust,
which has been issued to the Origination Trust. The FMBs remaining in the
Origination Trust (aggregate principal amount of approximately $161,352,000) are
a collateral pool for the Owner Trust's obligations under the Senior
Certificate. In addition, the Owner Trust obtained a municipal bond insurance
policy from MBIA to credit enhance Certificate distributions for the benefit of
the holders of the Floater Certificates and has also arranged for a liquidity
facility, issued by a consortium of highly rated European banks, with respect to
the Floater Certificates.
The effect of the TOP structure is that a portion of the interest received by
the Owner Trust on the FMBs it holds 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., at the distribution
amount that is required to enable the remarketing agent to sell the Floater
Certificates at par on any weekly determination date, with the residual interest
remitted to the Origination Trust via the Residual Certificate.
The Company's cost of funds relating to the TOP (calculated as income allocated
to the minority interest plus current fees as a percentage of the weighted
average amount of the outstanding Senior Certificate) was approximately 4.3% for
the period January 1, 1999 through September 30, 1999.
On June 29, 1999 a subsidiary of the Company completed a $90 million tax exempt
preferred equity offering (the "Preferred Offering") comprising 45 shares
("Series A Cumulative Preferred Shares") which were purchased by Merrill Lynch,
Legg Mason Wood Walker, Inc. and McDonald Investments, Inc. (the "Initial
Purchasers"). The Initial Purchasers then sold the Series A Cumulative Preferred
Shares to qualified institutional investors.
In connection with this transaction, the Company caused 100% of the ownership of
the Origination Trust to be transferred to Charter Mac Equity Issuer Trust (the
"Issuer"), a newly formed
25
<PAGE>
Delaware business trust and an indirectly owned subsidiary in which the Company
owns 100% of the common equity. The Issuer then issued the Series A Cumulative
Preferred Shares. As a result of such transaction, the Issuer became the direct
and indirect owner of the entire outstanding issue of 40 FMBs held by the
Origination Trust and Owner Trust, its two directly and indirectly-owned
subsidiaries (see Note 6). In addition to contributing the ownership of the
Origination Trust, the Company also contributed eight FMBs to the Issuer. As of
the closing, the aggregate par value of FMBs held directly or indirectly by the
Issuer or its subsidiaries was $463,699,028. Net proceeds of approximately
$86,400,000 from the Preferred Offering have been and are being used to acquire
and originate additional tax exempt assets for the Issuer. In the future, other
FMBs, RITES or other directly or indirectly owned investments of the Company or
its subsidiaries may be contributed to the Issuer.
The Series A Cumulative Preferred Shares have an annual preferred dividend rate
of 6 5/8% through June 30, 2009, payable quarterly in arrears on January 31,
April 30, July 31 and October 31 of each year, commencing October 31, 1999 and
payable upon declaration thereof by the Issuer's Board of Trustees, but only to
the extent of the Issuer's tax-exempt income (net of expenses) for the
particular quarter ("Quarterly Net Income"). The Series A Cumulative Preferred
Shares are subject to mandatory tender by the holders thereof for remarketing
and purchase on June 30, 2009 and each remarketing date thereafter at a price
equal to the $2,000,000 per share plus, to the extent of the Issuer's Quarterly
Net Income, an amount equal to all distributions accrued but unpaid on the
Series A Cumulative Preferred Shares.
Holders of the Series A Cumulative Preferred Shares may elect to retain their
shares upon a remarketing, with a distribution rate to be determined immediately
prior to the remarketing date by the remarketing agent. Each holder of the
Series A Cumulative Preferred Shares will be required to tender its shares to
the Issuer for mandatory repurchase on June 30, 2049, unless the Issuer decides
to remarket the shares on such date. The Issuer may not redeem the Series A
Cumulative Preferred Shares before June 30, 2009. After that date, all or a
portion of the shares may be redeemed, subject to certain conditions. The Series
A Cumulative Preferred Shares are not convertible into common Shares of the
Issuer or the Company.
The Series A Cumulative Preferred Shares rank, with respect to payment of
distributions and amounts upon liquidation, dissolution or winding-up of the
Issuer, senior to all classes or series of common shares of the Issuer and
therefore, of the Company.
During the period January 1, 1999 through November 12, 1999 the Company acquired
20 FMBs for an aggregate purchase price of approximately $126,056,000, not
including bond selection fees and expenses of approximately $2,642,000. The
purchases were financed by the TOP and the Preferred Offering.
To raise additional capital to acquire additional FMBs, the Company has
securitized certain FMBs through the Merrill Lynch Pierce Fenner & Smith
Incorporated ("Merrill Lynch") P-FLOATS/RITES program. Under this program, the
Company transfers certain FMBs to Merrill Lynch. Merrill Lynch then deposits
each FMB into an individual special purpose trust created to hold such asset,
together with a Credit Enhancement Guarantee ("Guarantee"). Two types of
securities are then issued by each trust, evidencing ownership in the FMBs and
the Guarantee: (1) Puttable Floating Option Tax-Exempt Receipts ("P-FLOATS"), a
short-term senior security which bears interest at a floating rate that is reset
weekly by the Remarketing Agent, Merrill Lynch, to result in the sale of the
P-FLOAT security at par (up to 99% of the underlying face amount of the FMB);
and (2) Residual Interest Tax Exempt Securities ("RITES), a subordinate security
which receives the residual interest payment after payment of P-FLOAT interest
and ongoing transaction fees. The P-FLOATS are sold to qualified third party,
tax-exempt investors
26
<PAGE>
and the RITES are sold back to the Company. The Company has the right, with 14
days notice to the trustee, to purchase the outstanding P-FLOATS and withdraw
the underlying FMBs from the trust. When the FMBs are deposited into the P-FLOAT
Trust, the Company receives the proceeds from the sale of the P-FLOATS less
certain transaction costs. In certain other cases, Merrill Lynch may directly
buy the FMBs from local issuers, deposit them in the trust, sell the P-FLOAT
security to qualified investors and then the RITES to the Company.
In order to facilitate the securitization, the Company has pledged certain
additional FMBs, cash and cash equivalents and temporary investments as
collateral for the benefit of the credit enhancer or liquidity provider. At
September 30, 1999, the total carrying amount of such additional FMBs, cash and
cash equivalents and temporary investments pledged as collateral was
$41,027,000, $870,154 and $29,211,000, respectively.
During May and June 1999, the Company transferred six FMBs with an aggregate
face amount of $52,807,000 to Merrill Lynch through the Merrill Lynch
P-FLOATS/RITES program and received proceeds of $52,807,000.
During June 1999, Merrill Lynch purchased three FMBs with an aggregate face
amount of $22,430,000. The FMBs were placed into a trust by Merrill Lynch
whereby P-FLOATS and RITES were sold. The Company purchased the related RITES
interests with an aggregate face amount of $15,000 for an aggregate purchase
price of $540,178 which includes bond selection fees and other transaction
costs.
On January 4, 1999, the obligor of the Countryside North FMB (the "Countryside
North Obligor") completed a refinancing with an unaffiliated third party. The
Countryside North Obligor then fully repaid its outstanding debt due to the
Company totaling $5,135,417 including the FMB in the amount of $5,000,000, a
$100,000 prepayment penalty and accrued interest due through the repayment date
of $35,417 resulting in a loss on the repayment (including the prepayment
penalty and the write off of bond selection fees and expenses) in the amount of
$25,493 which is included in general and administrative expenses.
During the nine months ended September 30, 1999 cash and cash equivalents of the
Company and its consolidated subsidiaries decreased approximately $4,681,000.
The decrease was primarily due to the purchase of FMBs ($118,401,000), purchase
of other bond related investments ($540,000), increase in deferred bond
selection costs ($2,736,000), the net purchase of temporary investments
($30,711,000), an increase in restricted cash and cash equivalents ($870,000),
an increase in other assets relating to investing activities ($252,000), loans
made to property ($307,000), distributions paid, ($16,233,000), an increase in
deferred costs relating to the Private Label Tender Option Program ($360,000)
and deferred costs relating to the issuance of preferred stock of subsidiary
($3,605,000) which exceeded cash provided by operating activities ($14,262,000),
proceeds from repayment of an FMB ($5,100,000), an increase in minority interest
($7,000,000), proceeds from secured borrowings ($52,807,000), principal payments
received from loans made to properties ($163,000) and the issuance of preferred
stock of subsidiary ($90,000,000). Included in the adjustments to reconcile the
net income to cash provided by operating activities is a loss on repayment of an
FMB ($25,000) and net amortization ($707,000).
The Company's growth will be financed by the TOP or similar programs, the
Preferred Offering, funds generated from operations in excess of distributions
and by placements of equity. 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 and RITES are anticipated
27
<PAGE>
to provide sufficient liquidity to fund the Company's operating expenditures,
debt service and distributions in future years.
Effective September 8, 1999, the Crowne Pointe, Orchard Hills and Newport
Village FMBs were modified to reflect: (i) a change in stated interest rate
(from 8.0% to 7.25%); (ii) allow for a portion of deferred base (Newport) and
other accrued interest through August 1999 to be paid at maturity or upon a sale
or refinancing; and (iii) extend the maturity (to 2029) mandatory redemption (to
2011) and prepayment lock-out dates (to 2006). The contingent interest feature
of the bonds was also modified. Although these modifications reduced the
estimated fair value of the FMBs by approximately $2,495,000 each FMB's
estimated fair value continues to exceed its amortized cost basis. The Company
currently anticipates that it will modify other FMBs from time to time to
generally reflect similar terms as those modified previously, 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 had
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 were based upon a percentage (which Class Counsel proposed
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 October 1, 1997. As of October 1,
1998, 25% of the Added Value amounted to $7,788,536 and, in accordance with an
Order and Stipulation of Settlement by the Court on February 18, 1999 (the
"Order"), Class Counsel was entitled to receive 608,955 shares of beneficial
interest in the Company. On April 15, 1999, the Company successfully negotiated
a discounted cash settlement (the "Discounted Cash Settlement") of $6,089,550
with Class Counsel in lieu of the issuance of shares. On April 26, 1999, the
Discounted Cash Settlement was approved by the Board of Trustees and it was paid
on May 3, 1999.
In November 1999, distributions of $1,523,750 ($33,861.11 per share) and
$5,042,342 ($.245 per share), which were declared in September 1999, were paid
to the preferred shareholders of subsidiary and shareholders of the Company,
respectively, from cash flow from operations for the quarter ended September 30,
1999.
On November 2, 1999, the Company and American Tax Exempt Bond Trust ("ATEBT"),
whose manager is an affiliate of the Manager of the Company, entered into a
merger agreement pursuant to which ATEBT would merge with and into CM Holding
Trust, a wholly-owned subsidiary of the Company. Following the merger, CM
Holding Trust would continue to be a wholly-owned subsidiary of the Company.
ATEBT is a Delaware business trust which owns four tax-exempt first mortgage
bonds and had total assets of approximately $27,572,000 and net assets of
approximately $26,721,000 at September 30, 1999. The four tax-exempt first
mortgage bonds have an aggregate outstanding loan balance of $23,775,000 at
September 30, 1999, have interest rates of 9% and have underlying properties
located in four different states.
Under the terms of the merger agreement, each share of beneficial ownership in
ATEBT outstanding on the effective date of the proposed merger (1,466,770 shares
at September 30, 1999) will be converted into the right to receive 1.43112
Shares of the Company. In addition, the manager of ATEBT (which owns a 1%
interest in ATEBT not currently represented by ATEBT
28
<PAGE>
shares) will receive 21,156 shares of the Company. Following the merger, current
ATEBT shareholders will own approximately 9.3% of the outstanding Shares of the
Company.
Consummation of the merger is subject to several conditions, including, without
limitation, approval by ATEBT shareholders. In addition, either entity has the
ability to opt out of the transaction if the 30-day average trading price of the
Company's Shares preceding the closing of the transaction is outside of the
Company's historical trading range of $11.13 to $14.50. Subject to ATEBT
shareholder approval, the Company and ATEBT expect that this transaction will
close during the first quarter of 2000.
The obligor of the Suntree and Players Club FMBs has entered into a contract to
sell the underlying properties to an independent third party. Such sale is
anticipated to occur prior to year end and will result in the redemption of the
FMBs and repayment of mortgage loans securing the bonds. Net proceeds from the
bond redemptions are currently being negotiated but are not anticipated to be
less than the carrying amounts of the FMBs. This sale will also extinguish
promissory note obligations for Players Club and Suntree of approximately
$472,000 and $130,000, respectively.
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, 1999 as compared to 1998,
total revenues, total expenses and net income increased due to the net result of
the acquisition of 35 FMBs during 1999 and 1998, the acquisition of three RITES
during 1999 and the repayment of one FMB during 1999. The Company's results of
operations for the three and nine months ended September 30, 1999 consisted
primarily of the results of the Company's investment in 66 FMBs and three RITES.
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 45 FMBs.
Interest income from FMBs increased approximately $3,028,000 and $7,162,000 for
the three and nine months ended September 30, 1999 as compared to 1998.
Increases of $2,557,000 and $6,880,000 were due to the acquisition of 35 FMBs
during 1999 and 1998 (the "1999 and 1998 Acquisitions"), decreases of $94,000
and $277,000 were due to the repayment of one FMB during 1999 (the "1999
Repayment") and decreases of $170,000 and $459,000 were due to the amortization
of goodwill in 1999 and the accretion of excess of acquired net assets over cost
in 1998, both relating to the Consolidation (see Note 1 to the consolidated
financial statements). Excluding the above increases and decreases, interest
income from FMBs increased approximately 12% and 6% for the three and nine
months ended September 30, 1999 as compared to 1998. The increase for the three
months was primarily due to the receipt of deferred base interest relating to
prior periods with respect to three FMBs.
29
<PAGE>
Interest income from other bond related investments was recorded for the three
and nine months ended September 30, 1999 relating to three RITES purchased in
June 1999.
Interest income from temporary investments increased approximately $499,000 and
$653,000 for the three and nine months ended September 30, 1999 as compared to
1998 primarily due to higher invested cash balances in 1999.
Interest income from promissory notes increased approximately $16,000 and
$58,000 for the three and nine months ended September 30, 1999 as compared to
1998 primarily due to loans made to the obligors of the Lakepoint and Shannon
Lake FMBs since September 30, 1998.
Interest expense increased approximately $253,000 and decreased approximately
$47,000 for the three and nine months ended September 30, 1999 as compared to
1998. The increase during the three months was primarily due to secured
borrowings in 1999 which offset the decrease during the nine months which was
primarily due to the repayment of the Interim Credit Facility in December 1998.
Loan servicing and asset management fees increased approximately $97,000 and
$240,000 for the three and nine months ended September 30, 1999 as compared to
1998 due to increases of $100,000 and $249,000, respectively, and decreases of
$3,000 and $9,000, respectively, relating to the 1999 and 1998 Acquisitions
and the 1999 Repayment.
General and administrative expenses increased approximately $144,000 and
$948,000 for the three and nine months ended September 30, 1999 as compared to
1998. These increases were primarily due to current fees relating to the TOP and
an increase in audit/tax fees due to the 1999 and 1998 Acquisitions.
Amortization increased approximately $92,000 and $301,000 for the three and nine
months ended September 30, 1999 as compared to 1998 primarily due to
amortization of deferred bond selection costs relating to the 1999 and 1998
Acquisitions and amortization of deferred costs relating to the TOP.
Minority interest in income of subsidiary increased approximately $854,000 and
$3,135,000 for the three and nine months ended September 30 1999 as compared to
1998 primarily due to a higher outstanding balance of the TOP during the three
and nine months ended September 30, 1999.
Income allocated to preferred shareholders of subsidiary during the three and
nine months ended September 30, 1999 relates to the Preferred Offering executed
on June 29, 1999.
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 $1,859,000 and $2,333,000 was not recognized for the nine
months ended September 30, 1999 and 1998, respectively.
30
<PAGE>
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 variations between generally accepted accounting principles
("GAAP") and cash received. One difference between CAD and GAAP is the
amortization of loan origination costs, costs relating to the TOP, costs
relating to the issuance of preferred stock of subsidiary and other intangible
assets. These amounts have been excluded from CAD due to their noncash nature.
Another difference is the noncash gain or loss associated with bond impairments,
repayments and sales for GAAP purposes, which are not included in the
calculation of CAD. During the nine months ended September 30, 1999, there was a
loss on the repayment of one FMB which is included in general and administrative
expenses. 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.
31
<PAGE>
Cash available for distribution ("CAD") for the three and nine months ended
September 30, 1999 and 1998 is summarized in the following table:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------- -------------------------------
1999 1998 1999 1998
------------------------------- -------------------------------
<S> <C> <C> <C> <C>
Sources of Cash
Interest income:
First mortgage bonds $ 10,155,870 $ 7,128,239 $ 26,742,542 $ 19,580,311
Other bond related investments 154,877 0 177,255 0
Temporary investments 556,614 57,655 814,611 162,049
Promissory notes 164,792 148,551 496,605 438,981
Net amortization (accretion)
included in income 70,457 (99,406) 160,953 (298,218)
------------- ------------- ------------- -------------
Total sources of cash $ 11,102,610 7,235,039 28,391,966 19,883,123
------------- ------------- ------------- -------------
Uses of Cash
Total expenses, minority interest
and income allocated to preferred
shareholders of subsidiary 4,760,084 1,828,861 10,001,185 3,899,712
Less: Amortization included in
expenses (216,051) (123,802) (546,105) (244,792)
Loss on repayment of the
Countryside North FMB 0 0 (25,493) 0
------------- ------------- ------------- -------------
Total uses of cash 4,544,033 1,705,059 9,429,587 3,654,920
------------- ------------- ------------- -------------
Cash available for distribution 6,558,577 5,529,980 18,962,379 16,228,203
Less: distributions to the Manager (540,175) (382,802) (1,434,421) (1,060,174)
------------- ------------- ------------- -------------
Cash available for distribution to
shareholders $ 6,018,402 $ 5,147,178 $ 17,527,958 $ 15,168,029
============= ============= ============= =============
Distributions to shareholders $ 5,042,349 $ 4,735,203 $ 15,024,122 $ 14,205,522
============= ============= ============= =============
Payout ratio 83.8% 92.0% 85.7% 93.7%
============= ============= ============= =============
Cash flows from:
Operating activities $ 8,294,642 $ 5,767,914 $ 14,262,356 $ 16,813,720
============= ============= ============= =============
Investing activities $ (56,731,770) $ (43,315,584) $(148,552,688) $ (80,104,093)
============= ============= ============= =============
Financing activities $ (5,734,784) $ 38,206,717 $ 129,609,263 $ 63,049,039
============= ============= ============= =============
</TABLE>
Recently Issued Accounting Standards
The Financial Accounting Standards Board has 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 the Company
beginning with the first quarter of 2001. Because the Company does
32
<PAGE>
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.
Forward-Looking Statements
Certain statements made in this report may constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended and Section 21E of the Securities Exchange Act of 1934, as amended. Such
forward-looking statements include statements regarding the intent, belief or
current expectations of the Company and its management and involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among other things, the
following: general economic and business conditions, which will, among other
things, affect the availability and creditworthiness of prospective tenants,
lease rents and the terms and availability of financing; adverse changes in the
real estate markets including, among other things, competition with other
companies; risks of real estate development and acquisition; governmental
actions and initiatives; and environment/safety requirements. 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.
Year 2000 Compliance
The year 2000 compliance issue concerns the potential inability of certain
computerized systems to accurately record dates after 1999. The Company utilizes
the computer services of an affiliate of the Manager. The affiliate of the
Manager has upgraded its computer information systems to be year 2000 compliant
and beyond. The affiliate of the Manager recently underwent a conversion of its
financial systems applications and upgraded all of its non-compliant, in-house
software and hardware inventory. The work stations which experienced problems
during the testing process were corrected with an upgrade patch. The costs
incurred by the Manager are not being charged to the Company. The most likely
worst case scenario that the Company faces is that computer operations will be
suspended for a few days to a week at January 1, 2000. The Company's contingency
plan is to have a complete backup done on December 31, 1999 and to have both
electronic and printed reports generated for all critical data up to and
including December 31, 1999.
With regard to third parties, the Company's Manager is in the process of
evaluating the potential adverse impact that could result from the failure of
material service providers to be year 2000 compliant. A detailed survey and
assessment was sent to material third parties in the fourth quarter of 1998. The
Company has received assurances from a majority of the third parties with which
it interacts that these third parties have addressed the year 2000 issues and is
evaluating these assurances for their adequacy and accuracy. In cases where the
Company has not received assurances from third parties, it is initiating further
mail and/or phone inquiries. The Company relies heavily on third parties and is
vulnerable to the failures of third parties to address their year 2000 issues.
There can be no assurance given that the third parties will adequately address
their issues.
Inflation
Inflation did not have a material effect on the Company's results for the
periods presented.
33
<PAGE>
Quantitative and Qualitative Disclosures About Market Risk
The nature of the Company's investments and the instruments used to raise
capital for their acquisition expose the Company to gains and losses due to
fluctuations in market interest rates. Market interest rates are highly
sensitive to many factors, including governmental policies, domestic and
international political considerations and other factors beyond the control of
the Company.
The FMBs generally bear interest at fixed rates, or pay interest according to
the cash flows of the Underlying Properties, which do not fluctuate with changes
in market interest rates. In contrast, payments required under the TOP program
and on the secured borrowings under the P-FLOAT program vary based on market
interest rates, primarily Bond Market Association ("BMA") and are re-set weekly.
Thus, an increase in market interest rates would result in increased payments
under these financing programs, without a corresponding increase in cash flows
from the investments in FMBs. For example, based on the $209,807,000 outstanding
under these financing programs at September 30, 1999, the Company estimates that
an increase of 0.5% in the BMA rate would decrease the Company's annual net
income by approximately $1,049,000; a 1.0% increase in BMA would decrease annual
net income by approximately $2,098,000. For the same reasons, a decrease in
market interest rates would generally benefit the Company, as a result of
decreased allocations to the minority interest and interest expense without
corresponding decreases in interest received on the FMBs, in the same amounts as
described above. During June of 1999, the Company completed a $90 million
Preferred Offering. These preferred shares carry a fixed dividend rate of 6 5/8%
through June 30, 2009, and so are not impacted by changes in market interest
rates.
Various financial vehicles exist which would allow Company management to
mitigate the impact of interest rate fluctuations on the Company's cash flows
and earnings. Although management has not engaged in any of these hedging
strategies in the past, it may do so in the future, depending on management's
analysis of the interest rate environment and the costs and risks of such
strategies.
Changes in market interest rates would also impact the estimated fair value of
the Company's portfolio of FMBs and RITES. The Company estimates the fair value
for each FMB or RITE as the present value of its expected cash flows, using a
discount rate for comparable tax-exempt investments. Therefore, as market
interest rates for tax-exempt investments increase, the estimated fair value of
the company's FMBs or RITES will generally decline, and a decline in interest
rates would be expected to result in an increase in the estimated fair values.
For example, the Company projects that a 1% increase in market rates for
tax-exempt investments would decrease the estimated fair value of its portfolio
of FMBs and RITES from its September 30, 1999 value of $569,487,941 to
approximately $496,607,000. A 1% decline in interest rates would increase the
value of the September 30, 1999 portfolio to approximately $666,309,000. Changes
in the estimated fair value of the FMBs and RITES do not impact the Company's
reported net income, earnings per share, distributions or cash flows, but are
reported as components of other comprehensive income and affect reported
shareholders' equity.
34
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings -
The Company is not a party to any material pending legal proceedings.
Item 2. Changes in Securities and Use of Proceeds
See Note 7 of the financial statements regarding the sale by a subsidiary
of the Company of 45 shares of Series A Cumulative Preferred Shares for
gross proceeds of $90 million.
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders
A proxy and proxy statement soliciting the vote of the Company's
shareholders for the Company's annual meeting of shareholders was sent to
shareholders on or about April 30, 1999. Such meeting was held on June 16, 1999.
Alan P. Hirmes was reelected as trustee for a three-year term expiring in 2002.
The proxy statement incorrectly noted that Stuart J. Boesky's term had expired
and his name was, therefore, listed on the proxy for reelection. Although Mr.
Boseky received sufficient votes for reelection, he will continue to be treated
as a trustee whose term expires in 2000, at which time he will again be eligible
for reelection to a new three-year term. A proposal to amend the Trust Agreement
to permit aggregate financing or leverage in excess of the 50% limit was not
approved.
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
3.1(f) Agreement dated as of April 15, 1999 between Charter
Municipal Mortgage Acceptance Company and Melvyn I.
Weiss, Esq. and Lawrence A. Sucharow, Esq., as Class
Counsel co-chairmen (incorporated by reference to the
Company's current report on Form 8-K filed with the
Commission on April 29, 1999
10(aaaar) First Mortgage Bond dated as of March 26, 1999, with
respect to the Hamilton Garden Apartments Project, in
the principal amount of $6,400,000 (incorporated by
reference to Exhibit 10 (aaaar) in the Company's March
31, 1999 Quarterly Report on Form 10-Q)
10(aaaas) First Mortgage Bond dated as of May 6, 1999, with
respect to the Del Monte Pines Apartments Project, in
the principal amount of $11,000,000 (incorporated by
reference to Exhibit 10 (aaaas) in the Company's June
30, 1999 Quarterly Report on Form 10-Q)
35
<PAGE>
10(aaaat) First Mortgage Bond dated as of May 6, 1999, with
respect to the Greenbriar Apartments Project, in the
principal amount of $9,585,000 (incorporated by
reference to Exhibit 10 (aaaat) in the Company's June
30, 1999 Quarterly Report on Form 10-Q)
10(aaaau) Taxable First Mortgage Bond dated as of May 6, 1999,
with respect to the Greenbriar Apartments Project, in
the principal amount of $2,015,000 (incorporated by
reference to Exhibit 10 (aaaau) in the Company's June
30, 1999 Quarterly Report on Form 10-Q)
10(aaaav) First Mortgage Bond dated as of May 6, 1999, with
respect to the Sycamore Woods Apartments Project, in the
principal amount of $9,415,000 (incorporated by
reference to Exhibit 10 (aaaav) in the Company's June
30, 1999 Quarterly Report on Form 10-Q)
10(aaaaw) First Mortgage Bond dated as of June 8, 1999, with
respect to the Lake Park Apartments Project, in the
principal amount of $3,638,000 (incorporated by
reference to Exhibit 10 (aaaaw) in the Company's June
30, 1999 Quarterly Report on Form 10-Q)
10(aaaax) First Mortgage Bond dated as of June 8, 1999, with
respect to the Casa Ramon Apartments Project, in the
principal amount of $4,744,000 (incorporated by
reference to Exhibit 10 (aaaax) in the Company's June
30, 1999 Quarterly Report on Form 10-Q)
10(aaaay) First Mortgage Bond dated as of June 22, 1999, with
respect to the Lewis Place at Ironwood Project, in the
principal amount of $4,000,000 (incorporated by
reference to Exhibit 10 (aaaay) in the Company's June
30, 1999 Quarterly Report on Form 10-Q)
10(aaaaz) Charter Mac Equity Issuer Trust, 6 5/8% Series A
Cumulative Preferred Shares, Purchase Agreement, dated
June 14, 1999 (incorporated by reference to Exhibit 10
(aaaaz) in the Company's June 30, 1999 Quarterly Report
on Form 10-Q)
10(aaaaaa) First Mortgage Bond dated as of July 1, 1999, with
respect to the Lakes Edge at Walden Project, in the
principal amount of $14,850,000 (filed herewith)
10(aaaaab) First Mortgage Bond dated as of July 29, 1999, with
respect to the Lenox Park Apartments Project, in the
principal amount of $13,000,000 (filed herewith)
36
<PAGE>
10(aaaaac) First Mortgage Bond dated as of August 12, 1999, with
respect to the Chapel Ridge of Little Rock Project, in
the principal amount of $5,600,000 (filed herewith)
10(aaaaad) First Mortgage Bond dated as of August 24, 1999, with
respect to the Riviera Apartments Project, in the
principal amount of $6,587,500 (filed herewith)
10(aaaaae) First Mortgage Bond dated as of August 31, 1999, with
respect to the Garfield Park Apartments Project, in the
principal amount of $3,260,000 (filed herewith)
10(aaaaaf) Restated First Mortgage Bond dated as of December 31,
1986, with respect to the Crowne Pointe Apartments
Project, in the principal amount of $5,075,000 (filed
herewith)
10(aaaaag) Restated First Mortgage Bond dated as of February 11,
1987, with respect to the Newport Village Apartments
Project, in the principal amount of $13,000,000 (filed
herewith)
10(aaaaah) Restated First Mortgage Bond dated as of December 31,
1986, with respect to the Orchard Hills Apartments
Project, in the principal amount of $5,650,000 (filed
herewith)
10(aaaaai) First Mortgage Bond dated as of September 20, 1999, with
respect to the Standiford Gardens Apartments Project, in
the principal amount of $9,520,000 (filed herewith)
10(aaaaaj) First Mortgage Bond dated as of September 28, 1999, with
respect to the Douglas Pointe Apartments Project, in the
principal amount of $7,100,000 (filed herewith)
10(aaaaak) First Mortgage Bond dated as of September 29, 1999, with
respect to the Chapel Ridge of Texarkana Project, in the
principal amount of $5,800,000 (filed herewith)
10(aaaaal) First Mortgage Bond dated as of September 30, 1999, with
respect to the Tallwood Project, in the principal amount
of $6,205,000 (filed herewith)
27 Financial Data Schedule (filed herewith).
37
<PAGE>
99 Amended and Restated Trust Agreement by and among J.
Michael Fried, Stuart J. Boesky, Alan P. Hirmes, Robert
W. Grier and Andrew T. Panaccione as Managing Trustees,
Charter Municipal Mortgage Acceptance Company and
Wilmington Trust Company, as Registered Trustee dated
June 22, 1999 relating to Charter Mac Equity Issuer
Trust (incorporated by reference to Exhibit 99 in the
Company's June 30, 1999 Quarterly Report on Form 10-Q)
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter.
38
<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
(Registrant)
Date: November 12, 1999 By: /s/ Stuart J. Boesky
--------------------
Stuart J. Boesky
Managing Trustee, President
and Chief Operating Officer
Date: November 12, 1999 By: /s/ John B. Roche
-----------------
John B. Roche
Chief Financial Officer
and Chief Accounting Officer
Exhibit 10 (aaaaaa)
UNITED STATES OF AMERICA
STATE OF FLORIDA
HOUSING FINANCE AUTHORITY OF DADE COUNTY (FLORIDA)
MULTIFAMILY MORTGAGE REVENUE BOND, 1985 SERIES 12
(WALDEN APARTMENTS PROJECTS)
No. R-4 $14,850,000.00
Next
Maturity Date Issue Date Remarketed Remarketing Date
------------- ---------- ---------- ----------------
12/01/2015 12/30/1985 12/01/1994 12/01/1995
Registered Owner: General Electric Capital Corporation
Principal Amount: Fourteen Million Eight Hundred and Fifty
Thousand Dollars
The HOUSING FINANCE AUTHORITY OF DADE COUNTY (FLORIDA) (the "Issuer"), a
public body corporate and politic authorized by No. 78-89, enacted by the Board
of County Commissioners of Dade County, Florida on December 12, 1978
(collectively, the "Act"), for value received, hereby promises to pay, solely
from the sources hereinafter described, to the order of the Registered Owner
named above, or registered assigns, the principal amount specified above, such
principal amount together with interest thereon on the principal amount from
time to time outstanding as follows: During the period of time (the "First Reset
Period") commencing December 1, 1994 (the "Remarketing Date") and terminating
December 1, 1995, the Bonds shall bear interest at the rate per annum equal to
eight and fifty one-hundredths of one percent (8.50%).
Each Bond shall bear interest on overdue principal and, to the extent
permitted by law, on overdue interest at the rate borne by such Bond on the date
on which such principal or such interest became due and payable plus a late
payment charge equal to four percent (4%) of the principal and/or interest due
and outstanding ten days following the Installment Payment Date. Any additional
payments which are required to be made under this Bond and the Note which are
not paid within ten days of the date upon which the additional payments are due
shall incur a late payment charge equal to four percent (4%) of the additional
payments required.
During the First Reset Period, the Issuer shall pay to Bondholder
immediately upon request, such amount or amounts (a "Compensation Amount") as
shall compensate Bondholder (as hereinafter defined) for any loss, cost or
expense incurred by Bondholder as a result of any prepayment of the Principal
Amount of the Bond on a date earlier than December 1, 1993 for whatever reason,
which Compensation Amount shall be based upon the excess, if any, of (x) the
aggregate amount of interest that would be payable at the Post-Inclusion Rate
(as defined below) on the amount which was the
<PAGE>
subject of the Prepayment for the period (the "Loss Period") from the date of
the occurrence of the Prepayment to December 1, 1993 over (y) the aggregate
amount of interest that Bondholder would have earned on an amount comparable to
the amount which was subject to the Prepayment for the Loss Period at the
Treasury Rate, i.e., rate per annum (computed on the basis of actual days
elapsed and year of 360 days) determined by Bondholder in its sole discretion on
either (i) the date three Business Days prior to the date of the Prepayment or
(ii) if Bondholder did not have knowledge of such Prepayment on such date, such
later date, after Bondholder shall have acquired such knowledge, as shall be
designated by Bondholder, as the case may be, to be the yield expressed at a
rate in the secondary market in United States Treasury securities having
substantially the same term as the Loss Period (such determination to be based
upon quotes obtained by Bondholder from established dealers in such market). A
determination by Bondholder as to any Compensation Amount payable pursuant to
this paragraph shall be conclusive absent manifest error.
In the event a Determination of Taxability occurs, then (a) the Interest
Rate shall, from the Taxable Date be increased to 11.55% (the "Post-Inclusion
Rate") and (b) the Bondholder may require the Issuer to cause the redemption of
all sums owing on this Bond within 120 days after notice by the Bondholder
requiring such redemption. Upon such Determination of Taxability there shall be
immediately due and owing an amount equal to the sum of (i) the diffference
between interest at the Interest Rate prior to inclusion and the interest due at
the Post-Inclusion Rate, plus interest on that amount at the Post-Inclusion Rate
from the Taxable Date and (ii) an amount which, after the payment of federal,
state and local taxes on that amount, equals any interest, penalties or
additions to tax payable by the holder and any prior holder of the Bonds (for
the purposes of this Bond, a "Bondholder") by reason of the failure of such
Bondholders to include interest in their gross income.
In the event of a U.S. Law Change as determined by Bondholder in good
faith and based upon an opinion of nationally recognized bond counsel, the
Issuer shall (following receipt of written notice of such U.S. Law Change, which
notice shall set forth in reasonable detail the nature and effective date
thereof and shall state that such U.S. Law Change does not apply only to
obligations issued or guaranteed by the Issuer or the Developer) make additional
payments in an amount designated by Bondholder in such notice as being the sum
necessary to compensate such Bondholder for the adverse effect of the U.S. Law
Change, which additional payment shall (x) not exceed 1/2 of 1% per annum with
respect to any single U.S. Law Change contemplated by clauses (a), (c) or (d) of
the definition of U.S. Law Change and (y) not exceed 3/4 or 1% per annum with
respect to any single U.S. Law Change contemplated by clause (b) of the
definition of U.S. Law Change, it being understood that the additional payment
necessary to compensate the Bondholder if any event contemplated under clause
(e) of the definition of U.S. Law Change
2
<PAGE>
shall occur shall not be limited in any respect. With respect to payments to the
then Bondholder, the additional payments as aforesaid shall be payable
commencing on the later of the Installment Payment Date next following the date
of receipt by Developer of such notice or on the Installment Payment Date
immediately preceding the effective date of the U.S. Law Change if such notice
shall have been given prior to the effective date thereof, and the initial
payment shall include the entire amount due in respect of any periods up to and
including the aforesaid next Interest Payment Date. With respect to payments to
The Chase Manhattan Bank (N.A.) (the "Bank") as a former Bondholder, payment in
full of the amount designated by such former Bondholder shall be due within ten
(10) days after the date of the aforesaid notice. Any such notice to Developer
shall be conclusive as to the occurrence of the U.S. Law Change specified
therein and, absent manifest error, as to the correctness of the amount of
additional payments specified therein. In addition to the foregoing and at any
time following the giving of such Notice, Developer shall have the option to
purchase the Bonds from the then Bondholders at any time within 180 days
following receipt of such notice for an amount equal to all outstanding
principal, interest, additional payments and late charges accrued and unpaid to
the date of purchase.
All computations of federal, state and local taxes required under this
Bond shall be calculated at the maximum applicable statutory rates taking into
account the deductibility of state and local taxes for federal income tax
purposes.
The covenants and agreements contained herein relating to the
Determination of Taxability and additional amounts due in connection with a
Determination of Taxability shall survive the payment in full of principal of
the Note or this Bond, and the termination of the Loan Agreement or the
Indenture.
The provisions of the immediately preceding four paragraphs of this Bond
shall be applicable only until December 1, 1993, except that the obligation to
make any payments required to be made hereunder to Bondholder as a former holder
of the Bond, by reason of a Determination of Taxability which causes the Taxable
Date to be a date earlier than December 1, 1993, shall survive beyond December
1, 1993, the payment in full of principal on the Note or this Bond and the
termination of the Agreement or the Indenture.
After the First Reset Period, provided the Bank has not exercised its
rights to accelerate payment of the Bonds and provided that the Bank or such
other accredited investor is the holder of 100% of the Bonds Outstanding, as
provided in the Indenture, unless the interest rate is otherwise set as provided
in the Indenture, the Bonds shall bear interest at the rate per annum equal to
eighty percent (80%) of the prime rate announced by The Chase Manhattan Bank,
N.A. from time to time, at its principal office in New York, New York.
3
<PAGE>
Payment of interest shall be made in equal monthly installments beginning
January 1, 1986 and ending on the Maturity Date set forth above. Interest on the
Bond shall be paid on an actual 360-day basis as provided in the Note.
Additional interest in the amount of $87,500 shall be payable to the Registered
Owner hereof on the Dated Date hereof. On each Reset Date commencing December 1,
1992, provided the Bonds are to be remarketed to the general public, the
interest rate per annum on the Bonds for each Reset Period shall be set in
accordance with the interest rate reset provisions set forth in the Indenture.
On the Maturity Date specified above, the entire unpaid principal balance,
accrued interst, and any other unpaid amounts shall be due and payable.
This Bond and said series of Bonds have been issued under and pursuant to
the provisions of the Act. THE BONDS AND THE PREMIUM, IF ANY, AND INTEREST
THEREON ARE LIMITED OBLIGATIONS OF THE ISSUER AND ARE NOT A LIEN OR CHARGE UPON
THE FUNDS OR PROPERTY OF THE ISSUER, EXCEPT TO THE EXTENT OF THE
HEREIN-MENTIONED PLEDGE AND ASSIGNMENT. THE BONDS AND THE PREMIUM, IF ANY, AND
INTEREST THEREON DO NOT CONSTITUTE A GENERAL INDEBTEDNESS OF THE ISSUER, OR A
DEBT OF THE STATE OF FLORIDA (THE "STATE"), DADE COUNTY, FLORIDA (THE "COUNTY")
OR ANY POLITICAL SUBSIDIVISION OF THE STATE, OR A LOAN OF THE CREDIT OF THE
ISSUER, THE STATE, THE COUNTY OR ANY POLITICAL SUBDIVISION OF THE STATE WITHIN
THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISIONS. NEITHER THE FAITH AND
CREDIT NOR THE TAXING POWER OF THE STATE, THE COUNTY OR ANY POLITICAL
SUBDIVISION OF THE STATE IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM,
IF ANY, OR INTEREST ON THE BONDS. THE ISSUER HAS NO TAXING POWER. NEITHER THE
STATE, THE COUNTY NOR ANY POLITICAL SUBDIVISION OF THE STATE IS LIABLE ON THE
BONDS OR THE PREMIUM, IF ANY, OR INTEREST THEREIN; NOR IN ANY EVENT SHALL THE
PRINCIPAL OF, OR PREMIUM, IF ANY, OR INTEREST ON, THE BONDS BE PAYABLE FROM ANY
FUNDS OR PROPERTIES OTHER THAN THOSE OF THE ISSUER, AND THEN ONLY TO THE EXTENT
PROVIDED HEREIN. The principal of and premium, if any, on this Bond are payable
in lawful money of the United States of America at the principal office of
Southeast Bank, N.A., Miami, Florida, now known as First Union National Bank of
Florida and its successors in trust (the "Trustee"). Interest is payable by wire
transfer or by check or draft mailed to the address of the Registered Owner at
the address shown on the registration books for the Bonds maintained by the
Trustee on behalf of the Issuer.
This Bond is one of a duly authorized issue of Bonds of the Issuer known
as its "Multifamily Mortgage Revenue Bonds, 1985 Series 12 (Walden Apartments
Project)" (the "Bonds"), all issued as a single series and executed and
delivered by the Issuer pursuant to a Trust Indenture, dated December 27, 1985
(the "Indenture"), executed by the Issuer to and with the Trustee. This Bond is
issued for the purpose of (1) providing funds to provide financing for
"Construction Expenditures," as defined in the Loan Agreement dated December 27,
1985 (the "Agreement"), between the Issuer, the Trustee and Walden Apartments
Associates, Ltd. (the "Developer"),
4
<PAGE>
in order to provide a portion of the financing for the acquisition and
construction of a multifamily residential rental development (the "Development")
located within Dade County, Florida (the "County"), to be occupied by persons or
families of low, moderate and middle income (as determined by the Issuer), and
to be occupied partially (at least 20%) by "individuals of low or moderate
income" within the meaning of Section 103(b)(4)(A) of the Internal Revenue Code
of 1954, as amended (the "Code"); and (2) paying certain costs incurred in
connection with the issuance of the Bonds. The Issuer has agreed to make a
mortgage loan (the "Loan") to the Developer pursuant to the Agreement with the
proceeds of the Bonds for the purpose of financing a part of the costs of
acquiring and constructing the Development. Pursuant to the terms of certain
deed restrictions which the Developer will accept pursuant to the Agreement and
the Regulatory Agreement as to Tax Exemption dated December 27, 1985 by and
among the Issuer, the Trustee and the Developer (the "Regulatory Agreement") and
record, certain limitations will apply with respect to the acquisition,
construction and operation of the Development in order to assure compliance with
the Code.
The Bonds are limited obligation Bonds of the Issuer, equally secured by
and payable solely from a lien on and pledge of certain revenues to be derived
from the pledge and assignment to the Trustee of installment payments payable by
the Developer to the Issuer and certain other funds described in the Indenture.
This Bond will be additionally secured by a mortgage (the "Mortgage"), as more
fully described in the Indenture. Reference is hereby made to the Indenture, the
Agreement, the Regulatory Agreement and the Mortgage, copies of which are on
file with the Trustee, for the provisions, among others, with respect to the
nature and extent of the rights, duties and obligations of the Issuer, the
Trustee, the Developer and the Registered Owners of the Bonds; the terms upon
which the Bonds are issued and secured; the collection and disposition of
revenues; a description of the properties and interests pledged; the
modification or amendment of the Indenture, the Regulatory Agreement and the
Agreement and other matters, to all of which the Registered Owner of this Bond
assents by the acceptance of this Bond.
The Indenture does not permit the issuance of any additional bonds on
parity with the Bonds.
Optional Redemption of Bonds. Prior to December 1, 1992, the Bonds are not
subject to redemption at the option of the Developer. There shall be no optional
redemption for any Reset Period, as defined in the Indenture of three years or
less or during the first three years of any Reset Period. During any Reset
Period commencing on or after December 1, 1992, which is greater than three
years in duration, the Bonds shall be redeemed in whole by the Issuer at the
option of the Developer at the prepayment prices (expressed as
5
<PAGE>
percentages of the principal amount of the Bonds) set forth below plus accrued
interest to the redemption date:
(a) If the Reset Period is four years, in the fourth year following
commencement of such Reset Period at a price of 101%.
(b) If the Reset Period is five years, in the fourth year following
commencment of such Reset Period at a price of 102% and in the fifth year
following commencement of such Reset Period at 101%.
(c) If the Reset Period is six years or more, in the fourth year following
commencement of such Reset Period at a price of 103%; in the fifth year
following commencement of such Reset Period at 102%; in the sixth year following
commencement of such Reset Period at 101%; and in any year thereafter at 100%;
provided, however, that the Bonds may be redeemed at the option of the Developer
at a redemption price of par on any Reset Date.
Such redemption price shall be paid from Available Moneys, if required, on
deposit in the Revenue Fund; provided that if the Bonds are rated (i) the
Developer shall deliver written notice to the Trustee that it intends to
exercise its option to prepay the Note in whole pursuant to the Agreement not
less than one hundred twenty-three (123) days prior to the specified redemption
date and shall deposit with the Trustee the full amount required to pay the
principal, premium, if any, and interest on the Bonds to be redeemed not less
than 123 days prior to such redemption date; (ii) an Event of Bankruptcy shall
not have occurred during the first ninety-one (91) days of such 123 day period;
and (iii) on or after the ninety-first (91st) day after deposit, the Trustee
shall receive the certificate of the Developer as to no Event of Bankruptcy
having occurred as required by the Agreement.
Extraordinary Optional Redemption of Bonds. The Bonds shall be redeemed by
the Issuer at the option of the Developer or at the direction of the Credit
Provider, if any, in whole on any date, or at the option of the Developer and
with the consent of the Credit Provider or Original Purchaser, or at the
direction of the Credit Provider or Original Purchaser in part on any
Installment Payment Date, selected by the Developer, the Credit Provider or
Original Purchaser at a redemption price of one hundred percent (100%) of the
principal amount thereof plus accrued interest to the redemption date, from
moneys on deposit in the Revenue Fund; provided that (1) the Developer shall
have delivered to the Trustee, the Issuer, the Credit Provider or Original
Purchaser and the Remarketing Agent not less than thirty (30) days prior to the
redemption date (a) a written certificate from the Developer certifying that
within the twelve months preceding the date of such notice all or a portion of
the Development has been damaged or destroyed by fire or other casualty or that
all or a portion of the Development has been condemned or permanently taken by
eminent domain proceedings,
6
<PAGE>
which in each case renders the Development unsatisfactory to the Developer for
its intended use, and that the Developer intends to exercise its option to
prepay the Note in whole or in part, pursuant to the Loan Agreement and thereby
effect the redemption of the Bonds in whole or in part, and (b) a written
consent from the Credit Provider or Original Purchaser to such prepayment and
redemption if such redemption or prepayment is in part; or (2) the Credit
Provider or Original Purchaser shall have delivered to the Trustee not less than
30 days prior to the redemption date a written notice that the Credit Provider
or Original Purchaser has required that any insurance proceeds or condemnation
awards received by the Trustee, the Credit Provider, Original Purchaser or the
Developer by reason of any damage or destruction to, or any condemnation or
other taking by eminent domain of, the Development or any part thereof shall be
applied to the prepayment of the Note in whole or in part pursuant to the
Agreement and thereby effect the redemption of the Bonds in whole or in part,
all subject to and in accordance with the terms and provisions of the Mortgage
or the Second Mortgage, both as defined in the Indenture.
Mandatory Redemption of Bonds.
(a) In the event the Bonds have been sold to the general public and a
Credit Provider has provided a Credit Instrument, the bonds shall be subject to
mandatory redemption in whole (but not in part) on the earliest date for which
the required notice of redemption can be given after a Determination of
Taxability at a redemption price equal to one hundred percent (100%) of the
principal amount of the Bonds Outstanding, plus accrued interest to the
redemption date from moneys in the Revenue Fund.
(b) The Bonds shall be subject to mandatory redemption in whole on any
Reset Date from moneys on deposit in the Revenue Fund at a redemption price
equal to one hundred percent (100%) of the principal amount thereof plus accrued
interest thereon to the redemption date in the event the conditions set forth in
Section 11.03(c) of the Indenture have not been complied with and satisfied as
of the date provided therein and the Credit Provider has not elected to purchase
the Bonds on such Reset Date as provided in the next succeeding sentence. All or
any portion of the Bonds called for redemption pursuant to this paragraph may be
purchased by the Creditor Provider in lieu of their redemption on the Reset Date
upon which such bonds otherwise would have been redeemed at a purchase price
equal to the principal amount thereof, if the Credit Provider shall deliver to
the Trustee, prior to the close of business on such Reset Date, a written notice
specifying the principal amount of Bonds to be so purchased and shall deposit
with the Trustee, on or prior to such date, immediately available funds which
shall be sufficient topay the purchase price of the Bonds to be so purchased,
subject to the provisions of the Indenture. The Trustee shall notify the Credit
Provider of the conditions, if any, which have not been satisfied as of the
fifteenth (15th) Business Day
7
<PAGE>
preceding any Reset Date. Subject to the timely receipt of the Trustee of the
moneys required for the purchase of any undelivered Bonds by the Credit Provider
in lieu of redemption under this paragraph such undelivered Bonds shall be
deemed to have been purchased by the Credit Provider on the date on which such
Bonds were to have been redeemed, and from and after such date, the Credit
Provider or its registered assigns shall be the Owner of such Bonds for all
purposes under this Indenture. New Bonds shall be executed, authenticated and
delivered in the place of undelivered Bonds as provided in the Indenture. It
shall be the duty of the Trustee to hold the moneys for the purchase of any
undelivered Bond without liability for interest thereon, for the benefit of the
former Holders of any such undelivered Bonds who shall thereafter be restricted
exclusively to such moneys for any claim of whatever nature on their part under
the Indenture or on, or with respect to, such undelivered Bonds. Interest
accruing from and after such date on such Bonds shall no longer be payable to
the former Holders thereof but thereafter shall be paid to the Credit Provider
or its registered assigns as the Holder of such Bonds. Accrued interest payable
to such date shall be paid to the registered Holders of the Bonds as of the
Regular Record Date immediately preceding such date in the same manner as if the
Bonds were not purchased by the Credit Provider. The Trustee shall maintain a
record of the numbers of the Bonds so purchased and of all undelivered Bonds
deemed to have been purchased by the Credit Provider and shall send written
notice by registered or certified mail to each such former Holder of any
undelivered Bonds at the address shown by the Bond Register advising such former
Holders that the purchase price for their Bonds is on deposit with the Trustee
and that they shall no longer be deemed the Holder of such Bonds or entitled to
receive interest thereon for any claim of whatever nature on their part under
the Indenture or on, or with respect to, such Bonds.
(c) The Bonds shall be subject to mandatory redemption in whole or in part
on the earliest date for which the required notice of redemption can be given
after the Trustee shall have received a written notice from the Credit Provider
stating that (a) an "Event of Default" has occurred and is continuing under the
Reimbursement Agreement or the Loan Agreement, or (b) that the Issuer has
defaulted in the performance of any of its undertakings and obligations under
the Indenture and that such default has continued for a period of sixty (60)
days after notice thereof from the Credit Provider, or (c) that cash proceeds
have been realized by the Trustee from the sale of the Development following the
foreclosure of the Mortgage or other acquisition by the Trustee of title to the
Development and requesting that the Bonds be redeemed in whole or in part at a
redemption price equal to one hundred percent (100%) of the principal amount
thereof, plus accrued interest to the redemption date.
(d) The Bonds shall be subject to mandatory redemption in whole or in part
on the earliest practicable date, upon a transfer
8
<PAGE>
of amounts from the Mortgage Loan Fund to the Revenue Fund after the earliest of
the Completion Date, as defined in the Agreement, or December 27, 1988, at a
redemption price equal to one hundred percent (100%) of the principal amount of
the Bonds then Outstanding, plus accrued interest to the redemption date.
(e) The Bonds purchased by the Credit Provider on any Reset Date shall be
redeemed on any date specified by such Credit Provider and occurring within
sixty (60) days after such Reset Date at a redemption price equal to one hundred
percent (100%) of the principal amount thereof, plus accrued interest thereon to
the redemption date upon delivery by such Credit Provider of written notice to
the Trustee, the Developer and the Issuer within such 60-day period demanding
such redemption and specifying such redemption date.
(f) During any Reset Period when the Bonds are Rated, the Bonds shall be
subject to mandatory redemption in whole on any Reset Date from moneys on
deposit in the Revenue Fund at a redemption price equal to one hundred percent
(100%) of the principal amount thereof plus accrued interest thereon to the
redemption date in the event the conditions set forth in Section 11.03 of the
Indenture have not been complied with and satisfied as of the date provided
therein.
On or after December 1, 1992, the holder of this Bond shall have the right
to tender this Bond for redemption upon providing notice required to be provided
pursuant to the Indenture and the Agreement.
Upon the occurrence of an Event of Default, as defined in the Indenture,
the principal of this Bond and all amounts due hereunder may become or be
declared due and payable before the stated maturity hereof in the manner, with
the effect, and subject to the conditions provided int he Indenture. From and
after such Event of Default and regardless of whether this Bond is accelerated,
the principal balance of this Bond shall bear an adjusted annual interest rate
equal to the lesser of (i) that rate of interest which is one and one-half
percent (1-1/2%) grater than the interest rate on the Bonds or (ii) the highest
applicable lawful rate.
Reference should be made to the Indenture and the Agreement regarding
Events of Default and a more complete description thereof. Default under the
Mortgage, subject to applicable grace periods thereunder, shall constitute an
Event of Default hereunder and may cause the acceleration of this Bond in its
entirety.
Notice of each such redemption shall be given by mail and by publication
to the Registered Owner of this Bond to be redeemed as a whole or in part as
provided in the Indenture; provided, however, that failure to mail or publish
such notice or any defect therein shall not affect the validity of the
redemption of any other Bonds.
9
<PAGE>
Notice having been so given, this Bond or any portion hereof designated for
redemption shall become due and payable upon the redemption date specified in
such notice, and from and after such date, notwithstanding that this Bond or any
portion hereof so called for redemption shall not have been surrendered for
payment, interest on such Bond or portion hereof shall cease to accrue.
Notwithstanding any provision of this Bond to the contrary, the Issuer
hereby covenants that in no event shall the interest contracted for, charged or
received in connection with this Bond (including interest on this Bond together
with any other costs or considerations that constitute interest under the laws
of the State which are contracted for, charged or received pursuant to this
Bond) exceed the maximum rate of interest allowed under the laws of the State or
the United States, to the extent applicable, as presently in effect and to the
extent allowable by such laws as such laws may be amended from time to time to
increase such rate; and in the event that this Bond is redeemed in accordance
with the provisions hereof requiring mandatory recemption, then such amounts
that constitute payments of interest on any such Bond, together with any costs
or considerations which constitute interest under the laws of the State or the
United States, to the extent applicable, may never exceed an amount which would
result in payment of interest at a rate in excess of the maximum interest rate
allowed by the laws of the State as presently in effect and to the extent
allowable by such laws as such laws may be amended from time to time to increase
such rate, and excess interest, if any, provided for in the Bond or otherwise,
shall be canceled automatically as of the date of such acceleration or, if
theretofore paid, shall be credited on such Bond.
This Bond shall be transferable when duly endorsed for transfer or
accompanied by an assignment duly executed by the Registered Owner or his
authorized representative, all subject to the terms and conditions of the
Indenture.
The Trustee shall be supplied with the name, address, social security
number or taxpayer identification number of the transferee hereof prior to
making such transfer.
The Issuer and the Trustee may deem and treat the person in whose name
this Bond is registered as the absolute owner hereof (whether or not this Bond
shall be overdue) for the purpose of receiving payment of or on account of
principal hereof and interest due hereon and for all other purposes, and neither
the Issuer nor the Trustee shall be affected by any notice to the contrary.
The Trustee shall not be required to transfer any Bond on any date which
is less than five (5) days prior to any Installment Payment Date, or during any
period beginning ten (10) days prior to maturity or during any period beginning
ten (10) days prior to the
10
<PAGE>
selection by the Trustee of Bonds to be redeemed prior to maturity and ending on
the date of the mailing of notice of such redemption.
The Indenture contains provisions permitting the Issuer, with the approval
of the Owner (so long as the Bank is then Registered Owner of at least 51% in
principal amount of the Bonds at the time Outstanding), the Owner and the
Trustee to execute supplemental indentures amending in any particular the
provisions of the Indenture; provided, however, that no such amendment, without
the consent of 51% of the Registered Owners of the Bonds, shall extend the time
of payment of the principal thereof or interest thereon, or reduce the principal
amount thereof or premium, if any, thereon, or the rate of interest thereon, or
make the principal thereof, premium, if any, or interest thereon payable in any
coin or currency other than that hereinbefore provided, or deprive such
Registered Owner of the lien of the Indenture on the revenues pledged
thereunder. Furthermore, the Indenture prohibits the execution of any
supplemental indentures that would permit the creation of any lien on the
revenues pledged under the Indenture equal to or prior to the lien thereof, or
that would reduce the aggregate principal amount of Bonds the Registered Owners
of which are required to consent to any amendment of the Indenture unless there
has been obtained the consent of the Registered Owner of each Bond then
outstanding. Except as provided in the Indenture, the Registered Owner of this
Bond shall have no right to enforce the provisions of the Indenture or take any
action with respect to any event of default under the Indenture.
All moneys deposited with the Trustee for the payment of principal of,
premium, if any, or interest on this Bond are presumed abandoned unless, within
seven years after they become payable or distributable, the Registered Owner
hereof has accepted payment of principal or income, corresponded in writing
concerning the property, or otherwise indicated an interest as evidenced by a
memorandum on file with the Trustee. In such event, the Trustee shall comply
with the provisions of Sections 717.01-717.30, Florida Statutes, as amended, or
any successor statute thereto, as to the disposition of such moneys and the
Issuer and the Trustee shall be relieved of all liability, to the extent of the
value of the moneys, for any claim which exists or may arise with respect to
such moneys.
Neither the members, officers, agents, employees or representatives of the
Issuer nor any person executing this Bond shall be personally liable hereon or
be subject to any personal liability by reason of the issuance hereof, whether
by virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty, or otherwise, all such liability being expressly
released and waived as a condition of and in consideration for the execution of
the Indenture and the issuance of this Bond.
11
<PAGE>
Capitalized terms herein shall have the meanings ascribed to them in the
Indenture or the Agreement (as herein defined).
IN WITNESS WHEREOF, the Housing Finance Authority of Dade County (Florida)
has caused this Bond to be signed by its Chairman, its seal to be printed hereon
and attested by the signature of its Secretary/Treasurer and the Bond to be
dated December 30, 1985.
HOUSING FINANCE AUTHORITY OF
DADE COUNTY (FLORIDA)
By: /s/ Milton J. Wallace
Chairman
(SEAL) HOUSING FINANCE AUTHORITY
DATE COUNTY - FLORIDA
ATTEST:
/s/ Michael B. Goldstein
Secretary/Treasurer
12
<PAGE>
CERTIFICATE OF AUTHENTICATION
Date of Authentication: December 15, 1994
This Bond is one of the Bonds described in the within-mentioned Indenture.
FIRST UNION NATIONAL BANK OF
FLORIDA, as Trustee
By: /s/ Lakshmi McGrath
Authorized Officer
CERTIFICATE OF VALIDATION
The undersigned Chairman of the Housing Finance Authority of Dade County
(Florida) HEREBY CERTIFIES that this Bond is one of a series of Bonds which were
validated by Judgment of the Circuit Court of Dade County, Florida, rendered on
the 5th day of December, A.D., 1984.
WITNESSETH my signature and the seal of Authority.
(SEAL) HOUSING FINANCE AUTHORITY /s/ Milton J. Wallace
DATE COUNTY - FLORIDA Chairman, Housing Finance Authority of
Dade County (Florida)
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto
- --------------------------------------------------------------------------------
(Name and Address and Tax Identification
or Social Security Number of Assignee)
the within Bond of the HOUSING FINANCE AUTHORITY OF DADE COUNTY (FLORIDA) and
does hereby irrevocably constitute and appoint to transfer the said Bond on the
books kept for registration thereof with full power of substitution in the
premises.
Dated:
----------------------------- ----------------------------------------
Signature guaranteed by
---------------------------------------------------------
13
<PAGE>
ASSIGNMENT
For value received, the undersigned sells, assigns and tranfers unto
LEHH, Inc., a Florida corporation
One O'Dell Plaza
Yonkers, New York 10701
Tax ID 65-0911941
------------------------------------------------
(Name and Address and Tax Identification or
Social Security Number of Assignee)
the within Bond of the HOUSING FINANCE AUTHORITY OF DADE COUNTY (FLORIDA) and
does hereby irrevocably constitute and appoint to transfer the said Bond on the
books kept for registration thereof with full power of substitution in the
premises.
Dated: June 30, 1999 GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Jay B. Marcus
-------------------------------------
Jay Marcus, Authorized Signatory
Signature guaranteed by: /s/ [ILLEGIBLE]
------------------------------
Manager
SIGNATURE GUARANTEED
MEDALLION GUARANTEED
[UNINTELLIGIBLE]
/s/ [ILLEGIBLE]
----------------------------------------
14
<PAGE>
ASSIGNMENT
For value received, the undersigned sells, assigns and transfers unto:
Charter Mac Equity Issuer Trust,
a Delaware Business Trust
625 Madison Avenue, 5th Floor
New York, New York 10022
Tax ID 52-6999949
------------------------------------------------
(Name and Address and Tax Identification or
Social Security Number of Assignee)
the within Bond of the HOUSING FINANCE AUTHORITY OF DADE COUNTY (FLORIDA) and
does hereby irrevocably constitute and appoint First Union National Bank to
transfer the said Bond on the books kept for registration thereof with full
power of substitution in the premises.
Dated: June 30, 1999 LEHH, Ino., a Florida corporation
By: /s/ Robert Kohn
-------------------------------------
Robert Kohn, Authorized Signatory
SIGNATURE GUARANTEED
MEDALLION GUARANTEED
FIRST UNION NATIONAL BANK
Signature guaranteed by: /s/ [ILLEGIBLE]
------------------------------
Authorized Signature
(2881) X9003473
SECURITIES TRANSFER [ILLEGIBLE]
15
<PAGE>
[LETTERHEAD OF LIEBLER, GONZALEZ & PORTUONDO, P.A.]
July 1, 1999
Charter Mac Equity Issuer Trust
625 Madison Avenue, 5th Floor
New York, New York 10022
Re: Bond Purchase Agreement dated June 30, 1999 between LEHH, Inc. and Charter
Mac Equity Issuer Trust (the "Agreement")
Ladies and Gentlemen:
The law of Liebler, Gonzalez & Portuondo, P.A., counsel for First National Bank,
as Trustee, agrees to hold the original Bond (as defined in the Agreement) to be
delivered to Charter Mac Equity Issuer Trust, as Purchaser (the "New
Bondholder"), at the closing of the above-referenced transaction on behalf of
the New Bondholder and to promptly deliver said original Bond to the Trustee for
registration in the name of New Bondholder. Please indicate your authorization
and agreement to the terms of this letter by signing in the space indicated
below.
Very truly yours,
/s/ Bernardo Portuondo
Bernardo A. Portuondo
Agreed to and accepted on this 1st
day of July, 1999.
CHARTER MAC EQUITY ISSUER TRUST,.
a Delaware business trust
By: Related Charter, L.P., a Delaware
limited partnership, its manager
By: Related Charter, LLC, a Delaware
limited liability company, its general
partner
By: /s/ Max Schlopy
--------------------------------
Name: Max Schlopy
Title: Vice President
Exhibit 10 (aaaaab)
TRANSFER OF THIS BOND IS RESTRICTED BY THE TERMS OF THE INDENTURE
AS DEFINED HEREIN, INCLUDING SECTION 3.12 THEREOF
THE OUTSTANDING PRINCIPAL AMOUNT OF THIS BOND MAY BE LESS THAN THE
FACE AMOUNT HEREOF AS A RESULT OF CERTAIN PARTIAL REDEMPTIONS OF
THIS BOND; NOTATIONS OF PARTIAL REDEMPTIONS ARE SET FORTH ON THE
ATTACHED TABLE OF PARTIAL REDEMPTIONS, HOWEVER THE RECORDS OF THE
TRUSTEE (AND NOT THE TABLE OF PARTIAL REDEMPTIONS) SHALL BE
CONCLUSIVE EVIDENCE OF THE OUTSTANDING PRINCIPAL AMOUNT HEREOF.
UNITED STATES OF AMERICA
STATE OF GEORGIA
HOUSING AUTHORITY OF THE CITY OF GAINESVILLE, GEORGIA
Multifamily Housing Revenue Bond
(Lenox Park Apartments Project)
Series 1999
Number: R-2
Dated Date: July 29, 1999
Maturity Date: July 1, 2041
Registered Owner: Charter Mac Equity Issuer Trust
Principal Amount: $13,000,000
Interest Rate: 6.80%
Housing Authority of the City of Gainesville, Georgia (the "Issuer"), a
public body corporate and politic of the State of Georgia (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 First Union National Bank in
Atlanta, Georgia, 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 in the
aggregate principal amount of $13,000,000 pursuant to, and is subject to, the
Trust Indenture dated as of July 1, 1999 between the Issuer and the Trustee (as
amended and supplemented from time to time, the "Indenture"), and the Housing
Authorities Law, O.C.G.A. Section 8-3-1, et seq., 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 Indenture does not permit the
issuance of additional bonds. The Bonds are all
<PAGE>
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. Pursuant to a Loan Agreement dated as of July 1, 1999, and a
Promissory Note (the "Note") dated the date of issuance of the Bonds, Lenox Park
Partners, L.P., a Georgia 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 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 political subdivision thereof shall be liable 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 DEED TO SECURE DEBT AND
SECURITY AGREEMENT FROM THE DEVELOPER FOR THE BENEFIT OF THE TRUSTEE, DATED AS
OF JULY 1, 1999, AND THE ASSIGNMENT OF LEASES, RENTS AND OTHER INCOME FROM THE
DEVELOPER TO THE TRUSTEE, DATED AS OF JULY 1,1999, ALL OF WHICH HAVE BEEN
ASSIGNED TO THE TRUSTEE PURSUANT TO THE INDENTURE, AND (II) ANY ADDITIONAL
SECURITY PROVIDED IN THE INDENTURE. Neither the State of Georgia 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 Georgia 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 Georgia 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 and including the
dated date hereof to the date of maturity or redemption or acceleration prior to
maturity at a rate of six and eighty-hundredths percent (6.80%) per annum
computed on the basis of a 360-day year comprised of twelve 30-day months. The
interest payable on the Bonds as provided above shall be payable on the first
day of each month commencing September 1, 1999, and on each Bond Payment Date.
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
<PAGE>
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.
Redemption of Bonds; Notation of Partial Redemptions. 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. In the event of a partial redemption of
this Bond, the owner hereof shall endorse on the Table of Partial Redemptions
attached hereto the amount and date of such partial redemption. Neither the
Trustee nor the Issuer shall be responsible for the owner's failure properly to
make any such endorsement and, in any event, the records of the Trustee (and not
any such endorsement) shall be conclusive evidence of the outstanding amount of
this Bond.
Enforcement. Only the Trustee 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 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 representative 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.
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this Bond to be
executed as of the Dated Date stated above.
HOUSING AUTHORITY OF THE CITY OF
GAINESVILLE, GEORGIA
By: /s/ J. Austin Edmondson
------------------------------------
Chairman
J. Austin Edmondson
(SEAL)
Attest:
/s/ Sterling Embry
- ------------------
Secretary
Sterling Embry
<PAGE>
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 (Lenox Park
Apartments Project) Series 1999 of the Housing Authority of the City of
Gainesville, Georgia.
FIRST UNION NATIONAL BANK,
as Trustee and Authenticating Agent
By: /s/ Emily Katt
------------------------------------
Authorized Representative
Emily Katt
Date of Authentication:
August 24, 1999
<PAGE>
VALIDATION CERTIFICATE
STATE OF GEORGIA
COUNTY OF HALL
The undersigned Clerk of the Superior Court of Hall County, Georgia HEREBY
CERTIFIES that the within bond was confirmed and validated by judgment of the
Superior Court of Hall County, Georgia, rendered on the 26th day of July, 1999,
that no intervention or objection was filed thereto and that no appeal has been
taken therefrom.
WITNESS the manual or duly authorized reproduced facsimile of my signature
and the impressed or reproduced facsimile seal of said Court.
/s/ Dwight S. Wood
----------------------------------------
Clerk, Superior Court
Hall County, Georgia
Dwight S. Wood
(SEAL)
[SEAL]
<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:
-------------------------
<PAGE>
TABLE OF PARTIAL REDEMPTIONS
- --------------------------------------------------------------------------------
Amount of Partial Unpaid Balance of
Date Redemption Principal Notation By
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Exhibit 10 (aaaaac)
THE TRANSFER OF THIS BOND IS SUBJECT TO CERTAIN
RESTRICTIONS AS SET FORTH IN THE INDENTURE
UNITED STATES OF AMERICA
STATE OF ARKANSAS
Pulaski County Public Facilities Board
Multifamily Housing Revenue Refunding Bond
(Chapel Ridge of Little Rock Project)
Series 1999
Dated Date: August 12, 1999
Maturity Date: August 1, 2039
Registered Owner: Charter MAC Equity Issuer Trust
Principal Amount: $5,600,000
Interest Rate: 7.125%
The Pulaski County Public Facilities Board (the "Issuer"), a public
facilities board of the State of Arkansas (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 Bank of Oklahoma, N.A. in Oklahoma City,
Oklahoma, 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 August 1, 1999 between the
Issuer and the Trustee (as amended and supplemented from time to time, the
"Indenture"), and the "Public Facilities Boards Act," Act No. 142 of the General
Assembly of the State of Arkansas for the year 1975, 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 $5,600,000 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. Pursuant to a Loan Agreement dated
as of August 1, 1999, and a Promissory Note (the "Note") dated the date of
issuance of the Bonds, Little Rock Housing Associates, an Arkansas limited
partnership (the "Developer"), has agreed to make payments to
<PAGE>
the Issuer in amounts equal to amounts of principal of and premium, if any, and
interest on the Bonds.
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. THE
OBLIGATIONS OF THE ISSUER ON THIS BOND ARE EXPRESSLY LIMITED TO AND ARE PAYABLE
SOLELY FROM (1) 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, DATED AS
OF AUGUST 1. 1999, AND THE ASSIGNMENT OF LEASES, RENTS AND OTHER INCOME FROM THE
DEVELOPER TO THE TRUSTEE, DATED AS OF AUGUST 1, 1999, ALL OF WHICH HAVE BEEN
ASSIGNED TO THE TRUSTEE PURSUANT TO THE INDENTURE, AND (II) ANY ADDITIONAL
SECURITY PROVIDED IN THE INDENTURE. Neither the State of Arkansas 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 Arkansas or any political subdivision thereof within the
meaning of any constitutional or statutory provision whatsoever, and shall not
directly, indirectly or contigently obligate the State of Arkansas 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.
THE BONDS ARE LIMITED OBLIGATIONS OF THE ISSUER, PAYABLE SOLELY FROM
REVENUES AND RECEIPTS SPECIFICALLY PLEDGED THEREFOR. IN NO EVENT SHALL THE BONDS
CONSTITUTE AN INDEBTEDNESS FOR WHICH THE FAITH AND CREDIT, OR ANY OF THE
REVENUES, OF PULASKI COUNTY, ARKANSAS, THE STATE OF ARKANSAS OR ANY POLITICAL
SUBDIVISION THEREOF, WITHIN THE MEANING OF ANY PROVISION OF THE CONSTITUTION OF
LAWS OF THE STATE OF ARKANSAS, ARE PLEDGED. THE ISSUER HAS NO TAXING POWER.
Interest on the Bonds
The Bonds (including this Bond) shall bear interest on the outstanding
principal amount thereof from and including the dated date hereof to the date of
maturity or redemption or acceleration prior to maturity at a rate of 7.125%
comprised of twelve 30-day months. The interest payable on the Bonds as provided
above shall be payable on the first day of each month commencing September 1,
1999, and on each Bond Payment Date.
A-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.
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.
A-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.
A-4
<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: By
------------------------------ -------------------------------------
Authorized Signature
- -----------------------------------------
Name of Transferee
- -----------------------------------------
Signature Guaranteed by
- -----------------------------------------
Name of Bank
By
---------------------------------------
Title
------------------------------------
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this Bond to be executed as of
the Dated Date stated above.
PULASKI COUNTY PUBLIC FACILITIES
BOARD
By /s/ Ro Arrington
-----------------------------------
Chairman
(SEAL) Ro Arrington
ATTEST:
/s/ Brooks McRae
- -------------------------------
Brooks McRae
A-5
<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 Refunding Bonds (Chapel Ridge of
Little Rock Project) Series 1999 of the Pulaski County Public Facilities Board.
BANK OF OKLAHOMA, N.A.,
as Trustee and Authenticating Agent
By /s/ W. Mark McCoy
----------------------------------
Authorized Signatory
Date of Authentication: August 12, 1999 W. Mark McCoy
A-6
Exhibit 10 (aaaaad)
Number: R-1 $6,587,500
California Statewide Communities Development Authority
Multifamily Housing Revenue Bond
(Riviera Apartments Project) Series 1999RR
Dated Date: Maturity Date: Interest Rate:
----------- -------------- --------------
August 24, 1999 August 1, 2036 7.125%
Registered Owner: CHARTER MAC EQUITY ISSUER TRUST
Principal Amount: SIX MILLION FIVE HUNDRED EIGHTY-SEVEN THOUSAND FIVE HUNDRED
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, 1999,
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
fall 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 $6,587,500 in aggregate principal
amount at any time Outstanding (except for additional bonds that may be issued
pursuant to the Indenture) 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.
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
<PAGE>
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.
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
UNDER THE INDENTURE. 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. 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.
Interest on the Bonds. The Bonds (including this Bond) shall bear
interest on the outstanding principal amount thereof at a rate of seven and
125/1000 percent (7.125%) 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, 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, 1999, and on each Bond Payment Date.
Limited Recourse. Pursuant to a Loan Agreement dated as of August 1,
1999, and a Promissory Note (the "Note") dated the date of issuance of the
Bonds, Antioch Riviera Limited, L.P., 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 AUGUST 1, 1999 AND THE OTHER LOAN DOCUMENTS, 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
2
<PAGE>
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 Trustee or the Majority Owner, as appropriate,
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/ D.B. Harrison
-----------------------------------
Vice Chairman
D.B. Harrison
ATTEST:
/s/ Norma Lamas
- --------------------------------
Secretary
Norma Lamas
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/ Leticia Sabiniano
-----------------------------------
Authorized Signature
Leticia Sabiniano
Date of Authentication: August 24, 1999
-------------------
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
Exhibit 10 (aaaaae)
UNITED STATES OF AMERICA
DISTRICT OF COLUMBIA
District of Columbia Housing Finance Agency
Multifamily Housing Revenue Bond
(Garfield Park Apartments Project),
Series 1999
Number: A-1
Dated Date: August 31, 1999
Maturity Date: August 1, 2031
Registered Owner: Charter MAC Equity Issuer Trust
Principal Amount: $3,260,000
Interest Rate: 7.25%
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO TRANSFER SUCH
SECURITY ONLY (A) TO THE BORROWER, THE INITIAL MAJORITY OWNER OR A PERSON
CONTROLLED BY OR UNDER COMMON CONTROL OR MANAGEMENT WITH THE INITIAL MAJORITY
OWNER OR THE BORROWER, (B) TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE PURSUANT TO
TRANSFER RESTRICTIONS CONTAINED IN THE INDENTURE, OR (C) AN "ACCREDITED
INVESTOR" WITHIN THE MEANING OF REGULATION D PROMULGATED UNDER THE SECURITIES
ACT OF 1933, SUBJECT TO THE ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF (i) AN INVESTOR LETTER SET
FORTH IN EXHIBIT B TO THE INDENTURE OR (ii) CERTIFICATIONS AND OTHER INFORMATION
SATISFACTORY TO EACH OF THEM.
The District of Columbia Housing Finance Agency (the "Issuer"), a,
corporate body and instrumentality of the District of Columbia (the "District"),
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 corporate trust office
of Norwest Bank Minnesota, N.A., a national banking association in Columbia,
Maryland, 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
<PAGE>
sources and as hereinafter provided, by wire transfer if there be one Owner of
all of the Bonds or otherwise by check of the Trustee mailed by first class mail
on the payment date to the record Owners of Bonds as the same appear upon the
books of registry to be maintained by the Trustee, registrar on the close of
business preceding such payment date.
This Bond is one of a series of bonds (the "Bonds") issued pursuant to,
and is subject to, the Trust Indenture dated as of August 1, 1999 between the
Issuer and the Trustee (as amended and supplemented from time to time, the
"Indenture"), and District of Columbia the Housing Finance Agency Act (Chapter
21, Title 45 of the District of Columbia Code Annotated, 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 $3,260,000 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 District and of
paying certain expenses incidental thereto. Pursuant to a Loan Agreement dated
as of August 1, 1999, and a Promissory Note (the "Note") dated the date of
issuance of the Bonds, Garfield Park Preservation, L.L.C., a District of
Columbia limited liability company (the "Borrower"), 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 Bonds shall be special and limited obligations of the Issuer payable
only from the sources provided in this Indenture and neither the District nor
any other political subdivision thereof shall be liable 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 THEREFOR AND
THE NOTE BY THE BORROWER, AND THE SECURITY THEREFOR PROVIDED BY THE FIRST DEED
OF TRUST AND SECURITY AGREEMENT FROM THE BORROWER FOR THE BENEFIT OF THE ISSUER,
DATED AUGUST 31, 1999, AND THE ASSIGNMENT OF LEASES, RENTS AND OTHER INCOME FROM
THE BORROWER TO THE ISSUER, DATED AS OF AUGUST 1, 1999, ALL OF WHICH HAVE BEEN
ASSIGNED TO THE TRUSTEE PURSUANT TO THE INDENTURE, AND (II) ANY ADDITIONAL
SECURITY PROVIDED IN THE INDENTURE. Neither the District, 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 District or any political subdivision thereof within the meaning
of any constitutional or statutory provision whatsoever, and shall not directly,
indirectly or contingently obligate the District 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.
<PAGE>
THE ISSUER IS NOT OBLIGATED TO PAY THE PRINCIPAL, PREMIUM, IF ANY, OR
INTEREST ON THIS BOND EXCEPT FROM THE REVENUES AND ASSETS SPECIFICALLY PLEDGED
THERETO PURSUANT TO THE INDENTURE, AND NEITHER THE FAITH AND CREDIT NOR THE
TAXING POWER OF THE DISTRICT OF COLUMBIA IS PLEDGED TO THE PAYMENT OF THE
PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THIS BOND.
Interest on the Bonds. The Bonds (including this Bond) shall bear interest
on the outstanding principal amount thereof from and including the dated date
hereof to the date of maturity or redemption or acceleration prior to maturity
at a rate of seven and one quarter percent (7.25%) computed based on a 360-day
year of twelve 30-day months. The interest payable on the Bonds as provided
above shall be payable on the first day of each month commencing October 1,
1999, and on each Bond Payment Date.
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.
Redemption of Bonds. The Bonds are subject to optional and mandatory
redemption by the Issuer and purchase in lieu of redemption by the Borrower
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 direct the
Trustee 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.
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this Bond to be executed as of
the Dated Date stated above.
DISTRICT OF COLUMBIA HOUSING
FINANCE AGENCY
By: /s/ Milton J. Bailey
-------------------------------------
Milton J. Bailey
Executive Director
(SEAL)
ATTEST:
By: /s/ Thomas E. Redmond
---------------------------------
Name: Thomas E. Redmond
Title: Designee to the Secretary
<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 (Garfield Park Apartments
Project), Series 1999 of the District of Columbia Housing Finance Agency.
NORWEST BANK MINNESOTA, N.A., as
Trustee and Authenticating Agent
By: /s/ Curtis Cliequennoi
-------------------------------------
Authorized Signatory
Date of Authentication: August 31, 1999
<PAGE>
Garfield Park Apartments
Apartments
Payment Schedule
Exhibit A
<TABLE>
<CAPTION>
Combined Payment Amount Interest Paid Principal Paid
Payment Number Payment Date Payment CharterMac CharterMac CharterMac Remaining Balance Issuer Fee Trustee Fee
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 10/1/99 $20,992.67 $19,695.83 $19,695.83 0 $3,260,200.00 $1,005.17 $291.67
2 11/1/99 $20,992.67 $19,695.83 $19,695.83 0 $3,260,000.00 $1,005.17 $291.67
2 12/1/99 $20,992.67 $19,695.83 $19,695.83 0 $3,260,O0O.O0 $1,005.17 $291.67
4 1/1/00 $20,992.67 $19,695.83 $19,695.83 0 $3,260,00O.00 $1,005.17 $291.67
5 2/1/00 $20,992.67 $19,695.33 $19,695.83 0 $3,260,000.00 $1,005.17 $291.67
6 3/1/0O $20,992.67 $19,695.83 $19,695.83 0 $3,260,000.00 $1,005.17 $291.67
7 4/1/00 $20,992.67 $19,695 83 $19,695.83 0 $3,260,000.00 $1,005.17 $291.67
8 5/1/00 $20,992.67 $19,695.83 $19,695 83 0 $3,260,000.00 $1,005.17 $291.67
9 6/1/00 $20,992.67 $19,695.83 $19,695.83 0 $3,260,000.00 $1,005.17 $291.67
10 7/1/00 $20,992.67 $19,695.83 $19,695.83 0 $3,260,000.00 $1,005.17 $291.67
11 8/1/00 $20,992.67 $19,695.83 $19,695.83 0 $3,260,000.00 $1,005.17 $291.67
12 9/1/0O $20,992.67 $19,695.83 $19,695 83 0 $3,260.000.00 $1,005.17 $291.67
13 10/1/00 $20,992.67 $19,695.83 $19,695.83 0 $3,260.000.00 $1,005.17 $291.67
14 11/1/00 $20,992.67 $19,695.83 $19,695.83 0 $3,260.000.00 $1,005.17 $291.67
15 12/1/00 $20,992.67 $19,695.83 $19,695.83 0 $3,260,000.00 $1,005.17 $291.67
16 1/1/01 $20,992.67 $19,695.83 $19,695.83 0 $3,260,000.00 $1,005.17 $291.67
17 2/1/01 $20,992.67 $19,695.83 $19,695.83 0 $3,260,000.00 $1,005.17 $291.67
18 3/1/01 $20,992.67 $19,695.83 $19,695.83 0 $3,260,000.00 $1,005.17 $291.67
19 4/1/01 $20,992.67 $19,695.83 $19,695.83 0 $3,260,O0O.00 $1,005.17 $291.67
20 5/1/01 $20,992.67 $19,695.83 $19,695.83 0 $3,260,000.00 $1,005.17 $291.67
21 6/1/01 $20,992.67 $19,695.83 $19,695.83 0 $3,260,000.00 $1,005.17 $291.67
22 7/1/01 $20,992.67 $19,695.83 $19,695.83 0 $3,260,000.00 $1,005.17 $291.67
23 8/1/01 $23,535.00 $22,238.95 $19,695.83 $2,543.11 $3,257,456.89 $1,004.38 $291.67
24 9/1/01 $23,534.21 $22,238.95 $19,680.47 $2,558.48 $3,254,898.41 $1,003.59 $291.67
25 10/1/01 $23,533.42 $22,238.95 $19,665.01 $2.573.94 $3,252,324.47 $1,002.80 $291.67
26 11/1/01 $23,532.62 $22,238.95 $19,649.46 $2,589.49 $3,249,734.99 $1,002.00 $291.67
27 12/1/01 $23,531.82 $22,238.95 $19,633.82 $2,605.13 $3,247,129.86 $1,001.20 $291.67
28 1/1/02 $23,531.01 $22,238.95 $19,618.08 $2,620.87 $3,244,508.98 $1,000.39 $291.67
29 2/1/02 $23,530.19 $22,238.95 $19,602.24 $2,636.70 $3,241,872.28 $ 999.58 $291.67
30 3/1/02 $23,529.38 $22,238.95 $19,586.31 $2,652.64 $3,239,219.64 $ 998.76 $291.67
31 4/1/02 $23,528.55 $22,238.95 $19,570.29 $2,668.66 $3,236,550.98 $ 997.94 $291.67
32 5/1/02 $23,527.73 $22,238.95 $19,554.16 $2,684.78 $3,233,866.20 $ 997.11 $291.67
33 6/1/02 $23,526.89 $22,238.95 $19,537.94 $2,701.01 $3,231,165.19 $ 996.28 $291.67
34 7/1/02 $23,526.05 $22,238.95 $19,521.62 $2,717.32 $3,228,447.87 $ 995.44 $291.67
35 8/1/02 $23,525.21 $22,238.95 $19,505.21 $2,733.74 $3,225,714.13 $ 994.60 $291.67
36 9/1/02 $23,524.36 $22,238.95 $19,488.69 $2,750.26 $3,222,963.87 $ 993.75 $291.67
37 10/1/02 $23,523.51 $22,238.95 $19,472.07 $2,766.87 $3,220,197.00 $ 992.89 $291.67
38 11/1/02 $23,522.65 $22,238.95 $19,455.36 $2,783.59 $3,217,413.41 $ 992.04 $291.67
39 12/1/02 $23,521.79 $22,238.95 $19,438.54 $2,800.41 $3,214,613.00 $ 991.17 $291.67
40 1/1/03 $23,520.92 $22,238.95 $19,421.62 $2,817.33 $3,211,795.68 $ 990.30 $291.67
41 2/1/03 $23,520.05 $22,238.95 $19,404.60 $2,834.35 $3,208,961.33 $ 989.43 $291.67
42 3/1/03 $23,519.17 $22,238.95 $19,387.47 $2,851.47 $3,206,109.86 $ 988.55 $291.67
43 4/1/03 $23,518.28 $22,238.95 $19,370.25 $2,868.70 $3,203,241.16 $ 987.67 $291.67
44 5/1/03 $23,517.39 $22,238.95 $19,352.92 $2,886.03 $3,200,355.12 $ 986.78 $291.67
45 6/1/03 $23,516.50 $22,238.95 $19,335.48 $2,903.47 $3,197,451.66 $ 985.88 $291.67
46 7/1/03 $23,515.60 $22,238.95 $19,317.94 $2,921.01 $3,194,530.65 $ 984.98 $291.67
47 8/1/03 $23,514.69 $22,238.95 $19,300.29 $2,938.66 $3,191,591.99 $ 984.07 $291.67
48 9/1/03 $23,513.78 $22,238.95 $19,282.53 $2,956.41 $3,188,635.58 $ 983.16 $291.67
49 10/1/03 $23,512.86 $22,238.95 $19,264.67 $2,974.27 $3,185,661.30 $ 982.25 $291.67
50 11/1/03 $23,511.94 $22,238.95 $19,246.70 $2,992.24 $3,182,669.06 $ 981.32 $291.67
51 12/1/03 $23,511.01 $22,238.95 $19,228.63 $3,010.32 $3,179,658.74 $ 980.39 $291.67
52 1/1/04 $23,510.08 $22,238.95 $19,210.44 $3,028.51 $3,176,630.23 $ 979.46 $291.67
53 2/1/04 $23,509.14 $22,238.95 $19,192.14 $3,046.81 $3,173,583.43 $ 978.52 $291.67
54 3/1/04 $23,508.19 $22,238.95 $19,173.73 $3,065.21 $3,170,518.21 $ 977.58 $291.67
55 4/1/04 $23,507.24 $22,238.95 $19,155.21 $3,083.73 $3,167,434.48 $ 976.63 $291.67
56 5/1/04 $23,506.29 $22,238.95 $19,136.58 $3,102.36 $3,164,332.12 $ 975.67 $291.67
57 6/1/04 $23,505.32 $22,238.95 $19,117.84 $3,121.11 $3,161,211.01 $ 974.71 $291.67
58 7/1/04 $23,504.36 $22,238.95 $19,098.98 $3,139.96 $3,158,071.05 $ 973.74 $291.67
59 8/1/04 $23,503.38 $22,238.95 $19,080.01 $3,158.93 $3,154,912.11 $ 972.76 $291.67
60 9/1/04 $23,502.40 $22,238.95 $19,060.93 $3,178.02 $3,151,734.09 $ 971.78 $291.67
61 10/1/04 $23,501.42 $22,238.95 $19,041.73 $3,197.22 $3,148,536.87 $ 970.80 $291.67
62 11/1/04 $23,500.42 $22,238.95 $19,022.41 $3,216.54 $3,145,320.34 $ 969.81 $291.67
63 12/1/04 $23,499.43 $22,238.95 $19,002.98 $3,235.97 $3,142,084.37 $ 968.81 $291.67
64 1/1/05 $23,498.42 $22,238.95 $18,983.43 $3,255.52 $3,138,828.85 $ 967.81 $291.67
</TABLE>
<PAGE>
Garfield Park Apartments
Apartments
Payment Schedule
Exhibit A
<TABLE>
<CAPTION>
Combined Payment Amount Interest Paid Principal Paid
Payment Number Payment Date Payment CharterMac CharterMac CharterMac Remaining Balance Issuer Fee Trustee Fee
<S> <C> <C> <C> <C> <C> <C> <C> <C>
65 2/1/05 $23,497.41 $22,238.95 $18,963.76 $3,275.19 $3,135,553.66 $966.80 $291.67
66 3/1/05 $23.496.40 $22,238.95 $18,943.97 $3,294.98 $3,132,258.63 $965.78 $291.67
67 4/1/05 $23,495.37 $22,238.95 $18,924.06 $3,314.38 $3,123,943.80 $964.76 $291.67
68 5/1/05 $23,494.35 $22,238.95 $18,904.04 $3,334.91 $3,125,608.38 $963.73 $291.67
69 6/1/05 $23,493.31 $22,238.95 $18,883.89 $3,355.06 $3,122,253.82 $962.69 $291.67
70 7/1/05 $23,492.27 $22,238.95 $18,863.62 $3,375.33 $3,118,878.53 $961.65 $291.67
71 8/1/05 $23,491.22 $22,238.95 $18,843.22 $3,395.72 $3,115,482.77 $960.61 $291.67
72 9/1/05 $23,490.17 $22,238.95 $18,822.71 $3,416,24 $3,112,066.53 $959.55 $291.67
73 10/1/05 $23,489.11 $22,238.95 $18,802.07 $3,436.88 $3,108,629.66 $958.49 $291.67
74 11/1/05 $23,488.04 $22.238.95 $18,781.30 $3,457.64 $3,105,172.01 $957.43 $291.67
75 12/1/05 $23,486.97 $22,238.95 $18,760.41 $3,478.53 $3,101,693.48 $956.36 $291.67
76 1/1/06 $23,485.89 $22,238.95 $18,739.40 $3,499.55 $3,098,193.93 $955.28 $291.67
77 2/1/06 $23,484.81 $22,238.95 $18,718.26 $3,520.69 $3,094,673.24 $954.19 $291.67
78 3/1/06 $23,483.72 $22,238.95 $18,696.98 $3,541.96 $3,091,131.28 $953.10 $291.67
79 4/1/06 $23,482.62 $22,238.95 $18,675.58 $3,563.36 $3,087,567.92 $952.00 $291.67
80 5/1/06 $23,481.51 $22,238.95 $18,654.06 $3,584.89 $3,083,983.03 $950.89 $291.67
81 6/1/06 $23,480.40 $22,238.95 $18,632.40 $3,606.55 $3,080,376.48 $949,78 $291.67
82 7/1/06 $23,479.28 $22,238.95 $18,610.61 $3,628.34 $3,076,748.14 $948.66 $291.67
83 8/1/06 $23,478.16 $22,238.95 $18,588.69 $3,650.26 $3,073,097.88 $947.54 $29l.67
84 9/1/06 $23,477.02 $22,238.95 $18,566.63 $3,672.31 $3,069,425.56 $948.41 $291.67
85 10/1/06 $23.475.88 $22,238.95 $18,544.45 $3,694.50 $3,065,731.06 $945.27 $291.67
86 11/1/06 $23,474.74 $22,238.95 $18,522.13 $3,716.82 $3,062,014.24 $944.12 $291.67
87 12/1/06 $23,473.58 $22,238.95 $18,499.67 $3,739.28 $3,058,274.96 $942.97 $291.67
88 1/1/07 $23,472.42 $22,238.95 $18,477.08 $3,761.87 $3,054,513.10 $941.81 $291.67
89 2/1/07 $23,471.26 $22,238.95 $18,454.35 $3,784.60 $3,050,728.50 $940.64 $291.67
90 3/1/07 $23,470.08 $22,238.95 $18,431.48 $3,807.46 $3,046,921.04 $939.47 $291.67
91 4/1/07 $23,468.90 $22,238.95 $18,408.48 $3,830.47 $3,043,090.57 $938.29 $291.67
92 5/1/07 $23,467.71 $22,238.95 $18,385.34 $3,853.61 $3,039,236.96 $937.10 $291.67
93 6/1/07 $23,466.52 $22,238.95 $18,362.06 $3,876.89 $3,035,360.07 $935.90 $291.67
94 7/1/07 $23,465.32 $22,238.95 $18,338.63 $3,900.31 $3,031,459.76 $934.70 $291.67
95 8/1/07 $23,464.11 $22,238.95 $18,315.07 $3,923.88 $3,027,535.88 $933.49 $291.67
96 9/1/07 $23,462.89 $22,238.95 $18,291.36 $3,947.58 $3,023,588.30 $932.27 $291.67
97 10/1/07 $23,461.67 $22,238.95 $18,267.51 $3,971.43 $3,019,616.86 $931.05 $291.67
98 11/1/07 $23,460.43 $22,238.95 $18,243.52 $3,995.43 $3,015,621.44 $929.82 $291.67
99 12/1/07 $23,459.19 $22,238.95 $18,219.38 $4,019.57 $3,011,601.87 $928.58 $291.67
100 1/1/08 $23,457.95 $22,238.95 $18,195.09 $4,043.85 $3,007,558.02 $927.33 $291.67
101 2/1/08 $23,456.69 $22,238.95 $18,170.66 $4,068.28 $3,003,489.73 $926.08 $291.67
102 3/1/08 $23,455.43 $22,238.95 $18,146.08 $4,092.86 $2,999,396.87 $924.81 $291.67
103 4/1/08 $23,454.16 $22,238.95 $18,121.36 $4,117.59 $2,995,279.28 $923.54 $291.67
104 5/1/08 $23,452.88 $22,238.95 $18,096.48 $4,142.47 $2,991,136.81 $922.27 $291.67
105 6/1/08 $23,451.60 $22,238.95 $18,071.45 $4,167.50 $2,986,969.32 $920.98 $291.67
106 7/1/08 $23,450.31 $22,238.95 $18,046.27 $4,192.67 $2,982,776.64 $919.69 $291.67
107 8/1/08 $23,449.01 $22,238.95 $18,020.94 $4,218.00 $2,978,558.64 $918.39 $291.67
108 9/1/08 $23,447.70 $22,238.95 $17,995.46 $4,243.49 $2,974,315.15 $917.08 $291.67
109 10/1/08 $23,446.38 $22,238.95 $17,969.82 $4,269.13 $2,970,046.02 $915.76 $291.67
110 11/1/08 $23,445.06 $22,238.95 $17,944.03 $4,294.92 $2,965,751.11 $914.44 $291.67
111 12/1/08 $23,443.72 $22,238.95 $17,918.08 $4,320.87 $2,961,430.24 $913.11 $291.67
112 1/1/09 $23,442.38 $22,238.95 $17,891.97 $4,346.97 $2,957,083.27 $911.77 $291.67
113 2/1/09 $23,441.04 $22,238.95 $17,865.71 $4,373.24 $2,952,710.03 $910.42 $291.67
114 3/1/09 $23,439.68 $22,238.95 $17,839.29 $4,399.66 $2,948,310.37 $909.06 $291.67
115 4/1/09 $23,438.31 $22,238.95 $17,812.71 $4,426.24 $2,943,884.14 $907.70 $291.67
116 5/1/09 $23,436.94 $22,238.95 $17,785.97 $4,452.98 $2,939,431.16 $906.32 $291.67
117 6/1/09 $23,435.56 $22,238.95 $17,759.06 $4,479.88 $2,934,951.27 $904.94 $291.67
118 7/1/09 $23,434.17 $22,238.95 $17,732.00 $4,506.95 $2,930,444.32 $903.55 $291.67
119 8/1/09 $23,432.77 $22,238.95 $17,704.77 $4,534.18 $2,925,910.14 $902.16 $291.67
120 9/1/09 $23,431.37 $22,238.95 $17,677.37 $4,561.57 $2,921,348.57 $900.75 $291.67
121 10/1/09 $23,429.95 $22,238.95 $17,649.81 $4,589.13 $2,916,759.44 $899.33 $291.67
122 11/1/09 $23,428.53 $22,238.95 $17,622.09 $4,616.86 $2,912,142.58 $897.91 $291.67
123 12/1/09 $23,427.10 $22,238.95 $17,594.19 $4,644.75 $2,907,497.83 $896.48 $291.67
124 1/1/10 $23,425.65 $22,238.95 $17,566.13 $4,672.81 $2,902,825.01 $895.04 $291.67
125 2/1/10 $23,424.20 $22,238.95 $17,537.90 $4,701.05 $2,898,123.97 $893.59 $291.67
126 3/1/10 $23,422.75 $22,238.9S $17,509.50 $4,729.45 $2,893,394.52 $892.13 $291.67
127 4/1/10 $23,421.28 $22,238.95 $17,480.93 $4,758.02 $2,888,636.5O $890.66 $291.67
128 5/1/10 $23,419.80 $22,238.95 $17,452.18 $4,786.77 $2,883,849.73 $889.19 $291.67
</TABLE>
<PAGE>
Garfield Park Apartments
Apartments
Payment Schedule
Exhibit A
<TABLE>
<CAPTION>
Combined Payment Amount Interest Paid Principal Paid
Payment Number Payment Date Payment CharterMac CharterMac CharterMac Remaining Balance Issuer Fee Trustee Fee
<S> <C> <C> <C> <C> <C> <C> <C> <C>
129 6/1/10 $23,418.32 $22,238.95 $17,423.26 $4,815.69 $2,879,034.24 $387.70 $291.67
130 7/1/10 $23,419.33 $22,238.95 $17,394.19 $4,844.73 $2,374,189.26 $886.21 $291.67
131 8/1/10 $23.415.32 $22,238.95 $17,364.39 $4,874.05 $2,369,315.21 $884.71 $291.67
132 9/1/10 $23,413.81 $22,238.95 $17,335.45 $4,903.50 $2,864,411.71 $883.19 $291 67
133 10/1/10 $23,412.29 $22,238.95 $17,305.32 $4,923.13 $2,859,478.58 $881.67 $291.67
134 11/1/10 $23,410.76 $22,238.95 $17,276.02 $4,962.93 $2,854,515.63 $880.14 $291.67
135 12/1/10 $23,409.22 $22,238.95 $17,246.03 $4,992.91 $2,849,522.74 $878.60 $291.67
136 1/1/11 $23,407.67 $22,238.95 $17,215.87 $5,023.28 32,844.499.66 $877.05 $291.67
137 2/1/11 $23,406.11 $22,238.95 $17,185.52 $5,053.43 $2,839,446.23 $875.50 $291 67
138 3/1/11 $23,404.55 $22,238.95 $17,154.99 $5,083.96 $2,834,362.27 $873.93 $291.67
139 4/1/11 $23,402.97 $22,238.95 $17,124.27 $5,114.67 $2,829,247.59 $872.35 $291.67
140 5/1/11 $23,401.38 $22,238.95 $17,093.37 $5,145.58 $2,824,102.02 $870.76 $291.67
141 6/1/11 $23,399.79 $22,238.95 $17,062.28 $5,176.96 $2,818,925.35 $869.17 $291.67
142 7/1/11 $23,398.18 $22,238.95 $17,031.01 $5,207.94 $2,813,717.41 $867.56 $291.67
143 8/1/11 $23,396.55 $22,238.95 $16,999.54 $5,239.40 $2,808,478.01 $865.95 $291.67
144 9/1/11 $23,394.94 $22,238.95 $16,967.89 $5,271.06 $2,803,206.95 $864.32 $291.67
145 10/1/11 $23,393.30 $22,238.95 $16,936.04 $5,302.90 $2,797,904.05 $862.69 $291.67
146 11/1/11 $23,391.66 $22,238.95 $16,904.00 $5,334.94 $2,792,569.10 $861.04 $291.67
147 12/1/11 $23,390.00 $22,238.95 $16,871.77 $5,367.18 $2,787,201.93 $859.39 $291.67
148 1/1/12 $23,388.34 $22,238.95 $16,839.34 $5,399.60 $2,781,802.33 $857.72 $291~67
149 2/1/12 $23,386.66 $22,238.95 $16,806.72 $5,432.22 $2,776,370.10 $856.05 $291.67
iSO 3/1/12 $23,384.98 $22,238.95 $16,773.90 $5,465.04 $2,770,905.06 $854.36 $291.67
151 4/1/12 $23,383.28 $22,238.95 $16,740.88 $5,498.06 $2,765,407.00 $852.67 $291.67
152 5/1/12 $23,381.58 $22,238.95 $16,707.67 $5,531.28 $2,759,875.72 $850.96 $291.67
133 6/1/12 $23,379.86 $22,238.95 $16,674.25 $5,564.70 $2,754,311.02 $849.25 $291.67
154 7/1/12 $23,378.14 $22,238.95 $16,640.63 $5,598.32 $2,748,712.70 $847.52 $291.67
155 8/1/12 $23,376.40 $22,238.95 $16,606.81 $5,632.14 $2,743,080.56 $845.78 $291.67
156 9/1/12 $23,374.65 $22,238.95 $16,572.78 $5,666.17 $2,737,414.39 $844.04 $291.67
157 10/1/12 $23,372.90 $22,238.95 $16,538.55 $5,700.40 $2,731,713.99 $842.28 $291.67
158 11/1/12 $23,371.13 $22,238.95 $16,504.11 $5,734.84 $2,725,979.15 $840.51 $291.67
159 12/1/12 $23,369.35 $22,238.95 $16,469.46 $5,769.49 $2,720,209.66 $838.73 $291.67
160 1/1/13 $23,367.56 $22,238.95 $16,434.60 $5,804.35 $2,714,405.31 $836.94 $291.67
161 2/1/13 $23,365.76 $22,238.95 $16,399.53 $5,839.41 $2,708,565.90 $835.14 $291.67
162 3/1/13 $23,363.95 $22,238.95 $16,364.25 $5,874.69 $2,702,691.21 $833.33 $291.67
163 4/1/13 $23,362.12 $22,238.95 $16,328.76 $5,910.19 $2,696,781.02 $831.51 $291.67
164 5/1/13 $23,360.29 $22,238.95 $16,293.05 $5,945.89 $2,690,835.12 $829.67 $291.67
165 6/1/13 $23,358.45 $22,238.95 $16,257.13 $5,981.82 $2,684,853.31 $827.83 $291.67
166 7/1/13 $23,356.59 $22,238.95 $16,220.99 $6,017.96 $2,678,835.35 $825.97 $291.67
167 8/1/13 $23,354.72 $22,238.95 $16,184.63 $6,054.32 $2,672,781.03 $824.11 $291.67
168 9/1/13 $23,352.85 $22,238.95 $16,148.05 $6,090.89 $2,666,690.14 $822.23 $291.67
169 10/1/13 $23,350.96 $22,238.95 $16,111.25 $6,127.69 $2,660,562.44 $820.34 $291.67
170 11/1/13 $23,349.06 $22,238.95 $16,074.23 $6,164.72 $2,654,397.73 $818.44 $291.67
171 12/1/13 $23,347.14 $22,238.95 $16,036.99 $6,201.98 $2,648,195.77 $816.53 $291.67
172 1/1/14 $23,345.22 $22,238.95 $15,999.52 $6,239.43 $2,641,956.34 $814.60 $291.67
173 2/1/14 $23,343.28 $22,238.95 $15,961.82 $6,277.13 $2,635,679.21 $812.67 $291.67
174 3/1/14 $23,341.34 $22,238.95 $15,923.90 $6,315.05 $2,629,364.16 $810.72 $291.67
175 4/1/14 $23,339.38 $22,238.95 $15,885.74 $6,353.20 $2,623,010.95 $808.76 $291.67
176 5/1/14 $23,337.41 $22,238.95 $15,847.36 $6,391.59 $2,616,619.36 $806.79 $291.67
177 6/1/14 $23,335.43 $22,238.95 $15,808.74 $6,430.20 $2,610,189.16 $804.81 $291 67
178 7/1/14 $23,333.43 $22,238.95 $15,769.89 $6,469.05 $2,603,720.10 $802.81 $291.67
179 8/1/14 $23,331.42 $22,238.95 $15,730.81 $6,508.14 $2,597,211.97 $800.81 $291.67
180 9/1/14 $23,329.40 $22,238.95 $15,691.49 $6,547.46 $2,590,664.51 $798.79 $291.67
181 10/1/14 $23,327.37 $22,238.95 $15,651.93 $6,587.02 $2,584,077.49 $796.76 $291.67
182 11/1/14 $23,325.33 $22,238.95 $15,612.13 $6,626.81 $2,577,450.68 $794.71 $291.67
183 12/1/14 $23,323.28 $22,238.95 $15,572.10 $6,666.85 $2,570,783.83 $792.66 $291.67
184 1/1/15 $23,321.21 $22.238.9S $15,531.82 $6,707.13 $2,564,076.71 $790.59 $291.67
185 2/1/1S $23,319.13 $22,238.95 $15,491.30 $6,747.65 $2,557,329.06 $788.51 $291.67
186 3/1/15 $23,317.03 $22,238.95 $15,450.53 $6,788.42 $2,550,540.64 $786.42 $291.67
187 4/1/15 $23,314.93 $22,238.95 $15,409.52 $6,829.43 $2,543,711.21 $784.31 $291.67
188 5/1/15 $23,312.81 $22,238.95 $15,368.26 $6,870.69 $2,536,840.52 $782.19 $291.67
189 6/1/15 $23,310.68 $22,238.95 $15,326.74 $6,912.20 $2,529,928.31 $780.06 $291.67
190 7/1/15 $23,308.53 $22,238.95 $15,284.98 $6,953.96 $2,522,974.35 $777.92 $291.67
191 8/1/15 $23,306.38 $22,238.95 $15,242.97 $6,995.98 $2,515,978.37 $775.76 $291.67
192 9/1/15 $23,304.21 $22,238.95 $15,200.70 $7,038.24 $2,508,940.13 $773.59 $291.67
</TABLE>
<PAGE>
Garfield Park Apartments
Apartments
Payment Schedule
Exhibit A
<TABLE>
<CAPTION>
Combined Payment Amount Interest Paid Principal Paid
Payment Number Payment Date Payment CharterMac CharterMac CharterMac Remaining Balance Issuer Fee Trustee Fee
<S> <C> <C> <C> <C> <C> <C> <C> <C>
193 10/1/15 $23,302.02 $22,238.95 $15,158.18 $7,080.77 $2,501,859.36 $771.41 $291.67
194 11/1/5 $23,299.33 $22,238.95 $15,115.40 $7,123.55 $2,494,735.82 $769.21 $291.67
195 12/1/15 $23,297.62 $22,238.95 $15,072.36 $7,166.58 $2,487,569.23 $767.00 $291.67
196 1/1/16 $23,295.39 $22,238.95 $15,029.06 $7,209.88 $2,480,359.35 $764.78 $291.67
197 2/1/16 $23,293.16 $22,238.95 $14,985.50 $7,253.44 $2,473,105.91 $762.54 $291.67
198 3/1/16 $23,290.91 $22,238.95 $14,941.68 $7,297.27 $2,465,808.64 $760.29 $291.67
199 4/1/16 $23,288.64 $22,238.95 $14,897 59 $7,341.35 $2,458,467.29 $758.03 $291.67
200 5/1/16 $23,286.37 $22,238.95 $14,853.24 $7,385.71 $2,451,081.58 $755.75 $291.67
201 6/1/16 $23,284.08 $22,238.95 $14,808.62 $7,430.33 $2,443,651.25 $753.46 $291.67
202 7/1/16 $23,281.77 $22,238.95 $14,763.73 $7,475.22 $2,436,176.03 $751.15 $291.67
203 8/1/16 $23.279.45 $22,238.95 $14,718.56 $7,520.38 $2,428,655.65 $748.84 $291.67
204 9/1/16 $23,277.12 $22,238.95 $14,673.13 $7,565.82 $2,421,089.83 $746.50 $291.67
205 10/1/16 $23,274.77 $22,238.95 $14,627.42 $7,611.53 $2,413,478.30 $744.16 $291.67
206 11/1/16 $23,272.41 $22,238.95 $14,581.43 $7,657.52 $2,405,820.79 $741.79 $291.67
207 12/1/16 $23,270.04 $22,238.95 $14,535.17 $7,703.78 $2,398,117.01 $739.42 $291.67
208 1/1/17 $23,267.65 $22,238.95 $14,488.62 $7,750.32 $2,390,366.68 $737.03 $291.67
209 2/1/17 $23,265.24 $22,238.95 $14,441.80 $7,797.15 $2,382,569.54 $734.63 $291.67
210 3/1/17 $23,262.82 $22,238.95 $14,394.69 $7,844.26 $2,374,725.28 $732.21 $291.67
211 4/1/17 $23,260.39 $22,238.95 $14,347.30 $7,891.65 $2,366,833.63 $729.77 $291.67
212 5/1/17 $23,257.94 $22,238.95 $14,299.62 $7,939.33 $2,358,894.31 $727.33 $291.67
213 6/1/17 $23,255.48 $22,238.95 $14,251.65 $7,987.29 $2,350,907.01 $724.86 $291.67
214 7/1/17 $23,253.00 $22,238.95 $14,203.40 $8,035.55 $2,342,871.46 $722.39 $291.67
215 8/1/17 $23,250.51 $22,238.95 $14,154.85 $8,084.10 $2,334,787.36 $719.89 $291.67
216 9/1/17 $23,248.00 $22,238.95 $14,106.01 $8,132.94 $2,326,654.42 $717.39 $291.67
217 10/1/17 $23,245.48 $22,238.95 $14,056.87 $8,182.08 $2,318,472.35 $714.86 $291.67
218 11/1/17 $23,242.94 $22,238.95 $14,007.44 $8,231.51 $2,310,240.84 $712.32 $291.67
219 12/1/17 $23,240.39 $22,238.95 $13,957.71 $8,281.24 $2,301,959.60 $709.77 $291.67
220 1/1/18 $23,237.82 $22,238.95 $13,907.67 $8,331.27 $2,293,628.32 $707.20 $291.67
221 2/1/18 $23,235.23 $22,238.95 $13,857.34 $8,381.61 $2,285,246.71 $704.62 $291.67
222 3/1/18 $23,232.63 $22,238.95 $13,806.70 $8,432.25 $2,276,814.47 $702.02 $291.67
223 4/1/18 $23,230.02 $22,238.95 $13,755.75 $8,483.19 $2,268,331.27 $699.40 $291.67
224 5/1/18 $23,227.39 $22,238.95 $13,704.50 $8,534.45 $2,259,796.83 $696.77 $291.67
225 6/1/18 $23,224.74 $22,238.95 $13,652.94 $8,586.01 $2,251,210.82 $694.12 $291.67
226 7/1/18 $23,222.08 $22,238.95 $13,601.07 $8,637.88 $2,242,572.94 $691.46 $291.67
227 8/1/18 $23,219.40 $22,238.95 $13,548.88 $8,690.07 $2,233,882.87 $688.78 $291.67
228 9/1/18 $23,216.70 $22,238.95 $13,496.38 $8,742.57 $2,225,140.30 $686.08 $291.67
229 10/1/18 $23,213.99 $22,238.95 $13,443.56 $8,795.39 $2,216,344.91 $683.37 $291.67
230 11/1/18 $23,211.26 $22,238.95 $13,390.42 $8,848.53 $2,207,496.38 $680.64 $291.67
231 12/1/18 $23,208.52 $22,238.95 $13,336.96 $8,901.99 $2,198,594.39 $677.90 $291.67
232 1/1/19 $23,205.76 $22,238.95 $13,283.17 $8,955.77 $2,189,638.62 $675.14 $291.67
233 2/1/19 $23,202.98 $22,238.95 $13,229.07 $9,009.88 $2,180,628.74 $672.36 $291.67
234 3/1/19 $23,200.18 $22,238.95 $13,174.63 $9,064.31 $2,171,564.42 $669.57 $291.67
235 4/1/19 $23,197.37 $22,238.95 $13,119.87 $9,119.08 $2,162,445.34 $666.75 $291.67
236 5/1/19 $23,194.54 $22,238.95 $13,064.77 $9,174.27 $2,153,271.17 $663.93 $291.67
237 6/1/19 $23,191.70 $22,238.95 $13,009.35 $9,229.60 $2,144,041.57 $661.08 $291.67
238 7/1/19 $23,188.83 $22,238.95 $12,953.58 $9,285.36 $2,134,756.21 $658.22 $291.67
239 8/1/19 $23,185.95 $22,238.95 $12,897.49 $9,341.46 $2,125,414.75 $655.34 $291.67
240 9/1/19 $23,183.08 $22,238.95 $12,841.05 $9,397.90 $2,116,016.85 $652.44 $291.67
241 10/1/19 $23,180.14 $22,238.95 $12,784.27 $9,454.68 $2,106,562.17 $649.52 $291.67
242 11/1/19 $23,177.21 $22,238.95 $12,727.15 $9,511.80 $2,097,050.37 $646.59 $291.67
243 12/2/19 $23,174.26 $22,238.95 $12,669.68 $9,569.27 $2,087,481.10 $643.64 $291.67
244 1/1/20 $23,171.29 $22,238.95 $12,611.86 $9,627.08 $2,077,854.02 $640.67 $291.67
245 2/1/20 $23,168.30 $22,238.95 $12,553.70 $9,685.25 $2,068,168.78 $637.69 $291.67
246 3/1/20 $23,165.30 $22,238.95 $12,495.19 $9,743.76 $2,058,425.01 $634.68 $291.67
247 4/1/20 $23,162.28 $22,238.95 $12,436.32 $9,802.63 $2,048,622.39 $631.66 $291.67
248 5/1/20 $23,159.23 $22,238.95 $12,377.09 $9,861.85 $2,038,760.53 $628.62 $291.67
249 6/1/20 $23,156.18 $22,238.95 $12,317.51 $9,921.44 $2,028,839.10 $625.56 $291.67
250 7/1/20 $23,153.10 $22,238.95 $12,257.57 $9,981.38 $2,018,857.72 $622.48 $291.67
251 8/1/20 $23,150.00 $22,238.95 $12,197.27 $10,041.68 $2,008,816.04 $619.38 $291.67
252 9/1/20 $23,146.89 $22,238.95 $12,136.60 $10,102.35 $1,998,713.69 $616.27 $291.67
253 10/1/20 $23,143.75 $22,238.95 $12,075.56 $10,163.38 $1,988,550.30 $613.14 $291.67
254 11/1/20 $23,140.60 $22,238.95 $12,014.16 $10,224.79 $1,978,325.52 $609.98 $291.67
255 12/1/20 $23,137.43 $22,238.95 $11,952.38 $10,286.56 $1,968,038.95 $606.81 $291.67
256 1/1/21 $23,134.24 $22,238.95 $11,890.24 $10,348.71 $1,957,690.24 $603.62 $291.67
</TABLE>
<PAGE>
Garfield Park Apartments
Apartments
Payment Schedule
Exhibit A
<TABLE>
<CAPTION>
Combined Payment Amount Interest Paid Principal Paid
Payment Number Payment Date Payment CharterMac CharterMac CharterMac Remaining Balance Issuer Fee Trustee Fee
<S> <C> <C> <C> <C> <C> <C> <C> <C>
257 2/1/21 $23,131.03 $22,238.95 $11,827.71 $10,411.23 $1,947,279.01 $600.41 $291.67
253 3/1/21 $23,127.80 $22,238.95 $11,764.31 $10,474.14 $1,936,804.87 $597.18 $291.67
259 4/1/21 $23,124.55 $22,238.95 $11,701.53 $10,537.42 $1,926,267.45 $593.93 $291.67
260 5/1/21 $23,121.28 $22,238.95 $11,637.87 $10,601.08 $1,915,666.37 $590.66 $291.67
261 6/1/21 $23,117.99 $22,238.95 $11,573.82 $10,665.13 $1,905,001.24 $587.38 $291.67
262 7/1/21 $23,114.63 $22,238.95 $11,509.38 $10,729.56 $1,894,271.68 $584.07 $291.67
263 8/1/21 $23,111.36 $22,238.95 $11,444.56 $10,794.39 $1,883,477.29 $580.74 $291.67
264 9/1/21 $23,108.01 $22,238.95 $21,379.34 $10,859.60 $1,872,617.69 $577.39 $291.67
265 10/1/21 $23,104.64 $22,238.95 $11,313.73 $10,925.21 $1,861,692.47 $574.02 $291.67
266 11/1/21 $23,101.25 $22,238.95 $11,247.73 $10,991.22 $1,850,701.25 $570.63 $291.67
267 12/1/21 $23,097.84 $22,238,95 $11,181.32 $11,057.63 $1,839,643.62 $567.22 $291.67
268 1/1/22 $23,094.41 $22,238.95 $11,114.51 $11,124.43 $1,828,519.19 $563.79 $291.67
269 2/1/22 $23,090.96 $22,238.95 $11,047.30 $11,191.64 $1,817,327.55 $560.34 $291.67
270 3/1/22 $23,087.49 $22,238.95 $10,979.69 $11,259.26 $1,806,068.29 $556.87 $291.67
271 4/1/22 $23,084.0O $22,238.95 $10,911.66 $11.327.28 $1,794,741.00 $553.38 $291.67
272 5/1/22 $23,080.48 $22,238.95 $10,843.23 $11,395.72 $1,783,345.28 $549.86 $291.67
273 6/1/22 $23,076.95 $22,238.95 $10,774.38 $11,464.57 $1,771,880.71 $546.33 $291.67
274 7/1/22 $23,073.39 $22,238.95 $10,705.11 $11,533.83 $1,760,346.88 $542.77 $291.67
275 8/1/22 $23,069.81 $22,238.95 $10,635.43 $11,603.52 $1,748,743.36 $539.20 $291.67
276 9/1/22 $23,066.21 $22,238.95 $10,565.32 $11,673.62 $1,737,069.74 $535.60 $291.67
277 10/1/22 $23,062.59 $22,238.95 $10,494.80 $11,744.15 $1,725,325.59 $531.98 $291.67
278 11/1/22 $23,058.95 $22,238.95 $10,423.84 $11,815.10 $1,713,510.48 $528.33 $291.67
279 12/1/22 $23,055.28 $22,238.95 $10,352.46 $11,886.49 $1,701,624.00 $524.67 $291.67
280 1/1/23 $23,051.60 $22,238.95 $10,280.64 $11,958.30 $1,689,665.69 $520.98 $291.67
281 2/1/23 $23,047.89 $22,238.95 $10,208.40 $12,030.55 $1,677,635.15 $517.27 $291.67
232 3/1/23 $23,044.16 $22,238.95 $10,135.71 $12,103.23 $1,665,531.91 $513.54 $291.67
283 4/1/23 $23,040.40 $22,238.95 $10,062.59 $12,176.36 $1,653,355.55 $509.78 $291.67
284 5/1/23 $23,036.62 $22,238.95 $9,989.02 $12,249.92 $1,641,105.63 $506.01 $291.67
285 6/1/23 $23,032.82 $22,238.95 $9,915.01 $12,323.93 $1,628,781.70 $502.21 $291.67
286 7/1/23 $23,029.00 $22,238.95 $9,840.56 $12,398.39 $1,616,383.30 $498.38 $291.67
287 8/1/23 $23,025.16 $22,238.95 $9,765.65 $12,473.30 $1,603,910.01 $494.54 $291.67
288 9/1/23 $23,021.29 $22,238.95 $9,690.29 $12,548.66 $1,591,361.35 $490.67 $291.67
289 10/1/23 $23,017.39 $22,238.95 $9,614.47 $12,624.47 $1,578,736.88 $486.78 $291.67
290 11/1/23 $23,013.48 $22,238.95 $9,538.20 $12,700.74 $1,566,036.13 $482.86 $291.67
291 12/1/23 $23,009.54 $22,238.95 $9,461.47 $12,777.48 $1,553,258.65 $478.92 $291.67
292 1/1/24 $23,005.57 $22,238.95 $9,384.27 $12,854.68 $1,540,403.98 $474.96 $291.67
293 2/1/24 $23,001.59 $22,238.95 $9,306.61 $12,932.34 $1,527,471.64 $470.97 $291.67
294 3/1/24 $22,997.58 $22,238.95 $9,228.47 $13,010.47 $1,514,461.17 $466.98 $291.67
295 4/1/24 $22,993.54 $22,238.95 $9,149.87 $13,089.08 $1,501,372.09 $462.92 $291.67
296 5/1/24 $22,989.48 $22,238.95 $9,070.79 $23,168.16 $1,488,203.93 $458.86 $291.67
297 6/1/24 $22,985.39 $22,238.95 $8,991.23 $13,247.71 $1,474,956.22 $454.78 $291.67
298 7/1/24 $22,981.29 $22,238.95 $8,911.19 $13,327.75 $1,461,628.47 $450.67 $291.67
299 8/1/24 $22,977.15 $22,238.95 $8,830.67 $13,408.27 $1,448,220.19 $446.53 $291.67
300 9/1/24 $22,972.99 $22,238.95 $8,749.66 $13,489.28 $1,434,730.91 $442.38 $291.67
301 10/1/24 $22,968.81 $22,238.95 $8,668.17 $13,570.78 $1,421,160.13 $438.19 $291.67
302 11/1/24 $22,964.60 $22,238.95 $8,586.18 $13,652.77 $1,407,507.36 $433.98 $291.67
303 12/1/24 $22,960.36 $22,238.95 $8,503.69 $13,735.26 $1,393,772.10 $429.75 $291.67
304 1/1/25 $22,956.10 $22,238.95 $8,420.71 $13,818.24 $1,379,953.86 $425.49 $291.67
305 2/1/25 $22,951.82 $22,238.95 $8,337.22 $13,901.73 $1,366,052.13 $421.20 $291.67
306 3/1/25 $22,947.50 $22,238.95 $8,253.23 $13,985.72 $1,352,066.42 $416.89 $291.67
307 4/1/25 $22,947.28 $22,238.95 $8,168.73 $14,070.21 $1,337,996.21 $416.67 $291.67
308 5/1/25 $22,947.28 $22,238.95 $8,083.73 $14,155.22 $1,323,840.99 $416.67 $291.67
309 6/1/25 $22,947.28 $22,238.95 $7,998.21 $14,240.74 $1,309,600.25 $416.67 $291.67
310 7/1/25 $22,947.28 $22,238.95 $7,912.17 $14,326.78 $1,295,273.47 $416.67 $291.67
311 8/1/25 $22,947.28 $22,238.95 $7,825.61 $14,413.34 $1,280,860.13 $416.67 $291.67
312 9/1/25 $22,947.28 $22,238.95 $7,738.53 $14,500.42 $1,266,359.71 $416.67 $291.67
313 10/1/25 $22,947.28 $22,238.95 $7,650.92 $14,588.02 $1,251,771.69 $416.67 $291.67
314 11/1/25 $22,947.28 $22,238.95 $7,562.79 $14,676.16 $1,237,095.53 $416.67 $291.67
315 12/1/25 $22,947.28 $22,238.95 $7,474.12 $14,764.83 $1,222,330.70 $416.67 $291.67
316 1/1/26 $22,947.28 $22,238.95 $7,384.91 $14,854.03 $1,207,476.67 $416.67 $291.67
317 2/1/26 $22,947.28 $22,238.95 $7,295.17 $14,943.78 $1,192,532.90 $416.67 $291.67
318 3/1/26 $22,947.28 $22,238.95 $7,204.89 $15,034.06 $1,177,498.84 $416.67 $291.67
319 4/1/26 $22,947.28 $22,238.95 $7,114.06 $15,124.89 $1,162,373.95 $416.67 $291.67
320 5/1/26 $22,947.28 $22,238.95 $7,022.68 $15,216.27 $1,147,157.67 $416.67 $291.67
</TABLE>
<PAGE>
Garfield Park Apartments
Apartments
Payment Schedule
Exhibit A
<TABLE>
<CAPTION>
Combined Payment Amount Interest Paid Principal Paid
Payment Number Payment Date Payment CharterMac CharterMac CharterMac Remaining Balance Issuer Fee Trustee Fee
<S> <C> <C> <C> <C> <C> <C> <C> <C>
321 6/1/26 $22,947.28 $22,238.95 $6,930.74 $15,308.20 $1,131,849.47 $416.67 $291.67
322 7/1/26 $22,947.28 $22,238.95 $6,838.26 $15,400.69 $1,116,448.78 $416.67 $291.67
323 8/1/26 $22,947.28 $22,238.95 $6,745.21 $15,493.74 $1,100,955.05 $416.67 $291.67
324 9/1/26 $22,947.28 $22,238.95 $6,651.60 $15,587.34 $1,085,367.70 $416.67 $291.67
325 10/1/26 $22,947.28 $22,238.95 $6,557.43 $15,681.52 $1,069,686.19 $416.67 $291.67
326 11/1/26 $22,947.28 $22,238.95 $6,462.69 $15,776.26 $1,053,909.93 $416,67 $291.67
327 12/1/26 $22,947.28 $22,238.95 $6,367.37 $15,871.57 $1,038,038.35 $416.67 $291.67
328 1/1/27 $22,947.28 $22,238.95 $6,271.48 $15,967.47 $1,022,070.89 $416.67 $291.67
329 2/1/27 $22,947.28 $22,238.95 $6,175.01 $16,063.94 $1,006,006.95 $416.67 $291.67
330 3/1/27 $22,947.28 $22,238.95 $6,077.96 $16,160.99 $989,845.97 $416.67 $291.67
331 4/1/27 $22,947.28 $22,238.95 $5,980.32 $16,258.63 $973,587.34 $416.67 $291.67
332 5/1/27 $22,947.28 $22,238.95 $5,882.09 $16,356.86 $957,230.48 $416.67 $291.67
333 6/1/27 $22,947.28 $22,238.95 $5,783.27 $16,455.68 $940,774.80 $416.67 $291.67
334 7/1/27 $22,947.28 $22,238.95 $5,683.85 $16,555.10 $924,219.70 $416.67 $291.67
335 8/1/27 $22,947.28 $22,238.95 $5,583.83 $16,655.12 $907,564.58 $416.67 $291.67
336 9/1/27 $22,947.28 $22,238.95 $5,483.20 $16,755.74 $890,808.84 $416.67 $291.67
337 10/1/27 $22,947.28 $22,238.95 $5,381.97 $16,856.98 $873,951.86 $416.67 $291.67
338 11/1/27 $22,947.28 $22,238.95 $5,280.13 $16,958,82 $856,993.04 $416.67 $291.67
339 12/1/27 $22,947.28 $22,238.95 $5,177.67 $17,061.28 $839,931.76 $416.67 $291.67
340 1/1/28 $22,947.28 $22,238.95 $5,074.59 $17,164.36 $822,767.40 $416.67 $291.67
341 2/1/28 $22,947.28 $22,238.95 $4,970.89 $17,268.06 $805,499.34 $416.67 $291.67
342 3/1/28 $22,947.28 $22,238.95 $4,866,56 $17,372.39 $788,126.95 $416.67 $291.67
343 4/1/28 $22,947.28 $22,238.95 $4,761.60 $17,477.35 $770,649.61 $416.67 $291.67
344 5/1/28 $22,947.28 $22,238.95 $4,656.01 $17,582.94 $753,066.67 $416.67 $291.67
345 6/1/28 $22,947.28 $22,238.95 $4,549.78 $17,689.17 $735,377.50 $416.67 $291.67
346 7/1/28 $22,947.28 $22,238.95 $4,442.91 $17,796.04 $717,581.46 $416.67 $291.67
347 8/1/28 $22,947.28 $22,238.95 $4,335.39 $17,903.56 $699,677.90 $416.67 $291.67
348 9/1/28 $22,947.28 $22,238.95 $4,227.22 $18,011.73 $681,666.17 $416.67 $291.67
349 10/1/28 $22,947.28 $22,238.95 $4,118.40 $18,120.55 $663,545.63 $416.67 $291.67
350 11/1/28 $22,947.28 $22,238.95 $4,008.92 $18,230.03 $645,315.60 $416.67 $291.67
351 12/1/28 $22,947.28 $22,238.95 $3,898.78 $18,340.16 $626,975.44 $416.67 $291.67
352 1/1/29 $22,947.28 $22,238.95 $3,787.98 $18,450.97 $608,524.47 $416.67 $291.67
353 2/1/29 $22,947.28 $22,238.95 $3,676.50 $18,562.44 $589,962.02 $416.67 $291.67
354 3/1/29 $22,947.28 $22,238.95 $3,564.35 $18,674.59 $571,287.43 $416.67 $291.67
355 4/1/29 $22,947.28 $22,238.95 $3,451.53 $18,787.42 $552,500.01 $416.67 $291.67
356 5/1/29 $22,947.28 $22,238.95 $3,338.02 $18,900.93 $533,599.09 $416.67 $291.67
357 6/1/29 $22,947.28 $22,238.95 $3,223.83 $19,015.12 $514,583.97 $416.67 $291.67
358 7/1/29 $22,947.28 $22,238.95 $3,108.94 $19,130.00 $495,453.96 $416.67 $291.67
359 8/1/29 $22,947.28 $22,238.95 $2,993.37 $19,245.58 $476,208.39 $416.67 $291.67
360 9/1/29 $22,947.28 $22,238.95 $2,877.09 $19,361.85 $456,846.53 $416.67 $291.67
361 10/1/29 $22,947.28 $22,238.95 $2,760.11 $19,478.83 $437,367.70 $416.67 $291.67
362 11/1/29 $22,947.28 $22,238.95 $2,642.43 $19,596.52 $417,771.18 $416.67 $291.67
363 12/1/29 $22,947.28 $22,238.95 $2,524.03 $19,714.91 $398,056.27 $416.67 $291.67
364 1/1/30 $22,947.28 $22,238.95 $2,404.92 $19,834.02 $378,222.25 $416.67 $291.67
365 2/1/30 $22,947.28 $22,238.95 $2,285.09 $19,953.85 $358,268.39 $416.67 $291.67
366 3/1/30 $22,947.28 $22,238.95 $2,164.54 $20,074.41 $338,193.98 $416.67 $291.67
367 4/1/30 $22,947.28 $22,238.95 $2,043.26 $20,195.69 $317,998.29 $416.67 $291.67
368 5/1/30 $22,947.28 $22,238.95 $1,921.24 $20,317.71 $297,680.58 $416.67 $291.67
369 6/1/30 $22,947.28 $22,238.95 $1,798.49 $20,440.46 $277,240.12 $416.67 $291.67
370 7/1/30 $22,947.28 $22,238.95 $1,674.99 $20,563.95 $256,676.17 $416.67 $291.67
371 8/1/30 $22,947.28 $22,238.95 $1,550.75 $20,688.19 $235,987.98 $416.67 $291.67
372 9/1/30 $22,947.28 $22,238.95 $1,425.76 $20,813.19 $215,174.79 $416.67 $291.67
373 10/1/30 $22,947.28 $22,238.95 $1,300.01 $20,938.93 $194,235.86 $416.67 $291.67
374 11/1/30 $22,947.28 $22,238.95 $1,173.51 $21,065.44 $173,170.42 $416.67 $291.67
375 12/1/30 $22,947.28 $22,238.95 $1,046.24 $21,192.71 $151,977.71 $416.67 $291.67
376 1/1/31 $22,947.28 $22,238.95 $918.20 $21,320.75 $130,656.96 $416.67 $291.67
377 2/1/31 $22,947.28 $22,238.95 $789.39 $21,449.56 $109,207.40 $416.67 $291.67
378 3/1/31 $22,947.28 $22,238.95 $659.79 $21,579.15 $87,628.25 $416.67 $291.67
379 4/1/31 $22,947.28 $22,238.95 $529.42 $21,709.53 $65,918.72 $416.67 $291.67
380 5/1/31 $22,947.28 $22,238.95 $398.26 $21,840.69 $44,078.04 $416.67 $291.67
381 6/1/31 $22,947.28 $22,238.95 $266.30 $21,972.64 $22,105.39 $416.67 $291.67
382 7/1/31 $22,947.28 $22,238.95 $133.55 $22,105.39 $0.00 $416.67 $291.67
</TABLE>
Exhibit 10 (aaaaaf)
================================================================================
UNITED STATES OF AMERICA
[LOGO] [EAGLE SEAL] [LOGO]
[ILLEGIBLE] $5,075,000
STATE OF WASHINGTON
WASHINGTON STATE HOUSING FINANCE COMMISSION
MULTIFAMILY HOUSING MORTGAGE REVENUE BOND, SERIES 1986
(CROWNE POINTE APARTMENTS PROJECT)
DATED DATE: DECEMBER 31, 1986
MATURITY DATE: AUGUST 31, 2029
REGISTERED OWNER: CHARTERMAC OWNER TRUST I
PRINCIPAL AMOUNT: FIVE MILLION SEVENTY-FIVE THOUSAND AND NO/100 DOLLARS
The Washington State Housing Finance Commission (the "Issuer"), a public
body corporate and politic and an instrumentality of the State of Washington
(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 Chase Manhattan Trust Company, National Association (the "Trustee") in
Seattle, Washington, as successor in trust to Seattle Trust and Savings Bank
(the "Original Trustee"), or its successor as Trustee, under the Indenture
(described below), the principal amount stated above, and to pay Interest on
said principal amount, from and including the dated date hereof until the
principal amount shall have been paid in accordance with the terms of this Bond,
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.
Payments made on the Mortgage Loan to the Owner of this Bond shall be for the
account of the Issuer, shall constitute payments on this Bond and shall
discharge the Issuer's obligations on this Bond to the extent of such payments,
applying any payments first to Interest payable on the due date of such payment
and thereafter to principal and premium, if any.
This Bond is one of a series of Bonds (the "Bonds") issued pursuant to the
Multifamily Housing Mortgage Revenue Bond (Crowne Pointe Apartments Project)
Trust Indenture between the Original Trustee and the Issuer (the "Original
Indenture") dated as of December 1, 1986, as amended and supplemented by a First
Supplemental Indenture (the "Supplemental Indenture") dated as of September 8,
1999 (the "Amendment Date") between the Issuer and the Trustee (which Original
Indenture, as amended by the Supplemental Indenture and as from time to time
further amended and supplemented, is hereby referred to as the "Indenture"), and
Ch. 161, Laws of Washington 1983, 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 shall have the
respective meanings accorded such terms in the Indenture. The Bonds issued under
the Indenture are expressly limited to $5,075,000 principal amount at any time
Outstanding and are all of like tenor, except as to numbers and denominations,
and are issued for the purpose of providing construction and permanent financing
for qualified multifamily rental housing units in the State and of paying
certain expenses incidental thereto.
PAYMENT OF THE PRINCIPAL OF, INTEREST ON, AND REDEMPTION PREMIUM, IF ANY,
ON THE BONDS, SHALL BE A VALID CLAIM ONLY AS AGAINST THE SPECIAL FUND OR FUNDS
RELATING THERETO, IS NOT AN OBLIGATION OF THE STATE OR ANY MUNICIPAL
CORPORATION, SUBDIVISION OR AGENCY OF THE STATE OTHER THAN THE COMMISSION, AND
NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF WASHINGTON OR
ANY MUNICIPAL CORPORATION, SUBDIVISION OR AGENCY OF THE STATE, IS PLEDGED TO THE
PAYMENT OF THE PRINCIPAL OF, INTEREST ON AND REDEMPTION PREMIUM, IF ANY, ON THE
BONDS.
Interest on the Bonds.
(a) General. The Bonds shall bear interest as provided below.
(b) Base Interest. Until the Conversion Date, the Bonds shall bear base
interest calculated and payable as follow s (which interest is referred to
herein as "Base Interest"):
(1) During the Initial Period, the Bonds shall bear Base Interest at
a rate equal to 10.0% pet annum payable on each payment date specified in
paragraph (e)(1) below.
(2) During the Second Period, the Bonds shall bear Base Interest at
a rate equal to 9.0% per annum payable on each payment date specified in
paragraph (e)(1) below.
(3) During the Third Period, the Bonds shall bear Base Interest at a
rate equal to 8.0% per annum to (but not including) the Amendment Date,
and 7.25% per annum thereafter, payable on each payment date specified in
paragraph (e)(1) below.
Page 1 of 8
================================================================================
<PAGE>
================================================================================
UNITED STATES OF AMERICA
[LOGO] [EAGLE SEAL] [LOGO]
[ILLEGIBLE] $5,075,000
Base Interest shall be calculated on the basis of a year of 365 days, actual
days elapsed.
(c) Contingent Interest. After the Initial Period and until the Conversion
Date, the Bonds also shall bear interest calculated and payable as follows:
(1) During each year or part thereof of the Third Period, to (but
not including) the Amendment Date, the Bonds bore Contingent Interest (as
defined in the Original Indenture) at an annual rate equal to the Primary
Contingent Interest Rate (as defined in the Original Indenture) payable on
the basis and to the extent of 100% of Net Cash Flow for each such year,
or part thereof, or, to the extent not fully paid on or before the
Amendment Date because 100% of Net Cash Flow was insufficient, on the
basis and to the extent of 100% of Net Sale or Refinancing Proceeds.
Contingent Interest equal to Maximum Primary Contingent Interest (as
defined in the Original Indenture) was payable on the Bonds on each
payment date specified in paragraph (e)(2) below on the basis and to the
extent of 100% of Net Cash Flow, measured for purposes of such payment and
subject to the adjustments and reconciliation as specified in paragraph
(f) below. If 100% of Net Cash Flow was insufficient to pay the Maximum
Primary Contingent Interest on such dates, then there was payable the
maximum amount possible to the extent of 100% of Net Cash Flow (which
amount was referred to as the "Primary Contingent Interest").
The difference between the Maximum Primary Contingent Interest and
the Primary Contingent Interest was deferred with interest thereon at 9.0%
per annum, compounded annually, with respect to all such interest accrued
and unpaid to (but not including) the Amendment Date (such difference
together with the compounded interest thereon was referred to collectively
with all such amounts previously deferred and unpaid as "Primary Deferred
Interest").
All Primary Deferred Interest (in the agreed approximate amount of
$543,878) which remains accrued and unpaid as of the Amendment Date is
hereby forgiven, abrogated and discharged. From and after the Amendment
Date, no further Maximum Primary Contingent Interest shall accrue or be
due or payable.
(2) During each year or part thereof, after the Initial Period and
to (but not including) the Amendment Date, the Bonds bore Contingent
Interest at an annual rate equal to the Supplemental Contingent Interest
Rate payable on the basis and to the extent of 25% of so much of Net Cash
Flow for each such year, or part thereof, as remained after reducing Net
Cash Flow by the amount of any payments on the basis of Net Cash Flow
specified above in paragraph (c)(l). As of the Amendment Date, no
Supplemental Contingent Interest (as defined below) has been paid, and all
such interest remains accrued and unpaid.
From and after the Amendment Date, and to the Conversion Date,
Contingent Interest equal to Maximum Supplemental Contingent Interest
shall continue to be payable on the Bonds on each payment date specified
in paragraph (e)(2) below on the basis and to the extent of 25% of Net
Cash Flow, measured for purposes of such payment and subject to the
adjustments and reconciliation as specified in paragraph (f) below. If 25%
of Net Cash Flow is insufficient to pay the Maximum Supplemental
Contingent Interest payable on any payment date specified in paragraph
(e)(2) below, then there shall be payable the maximum amount possible on
the basis and to the extent of 25% of Net Cash Flow (which amount is
referred to as the "Supplemental Contingent Interest").
The difference between the Maximum Supplemental Contingent Interest
and the Supplemental Contingent Interest shall be deferred without
interest (such difference is referred to collectively with all such
amounts previously deferred and unpaid, including amounts deferred and
unpaid prior to the Amendment Date, as the "Supplemental Deferred
Interest") and shall thereafter be payable on the earliest possible
payment dates specified in paragraph (e)(2) below on the basis and to the
extent of 25% of Net Cash Flow, measured for purposes of such payment and
subject to the adjustments and reconciliation as specified in paragraph
(f) below. Supplemental Deferred Interest shall be paid on the basis and
to the extent of 25% of Net Cash Flow before any Supplemental Contingent
Interest is paid on such basis.
To the extent that Maximum Supplemental Contingent Interest and all
Supplemental Deferred Interest are not fully paid on the basis and to the
extent of 25% of Net Cash Flow on payment dates specified in paragraph
(e)(2) below, they shall be payable on the basis and to the extent of 25%
of Net Sale or Refinancing Proceeds on the earliest possible payment dates
specified in paragraph (e)(3) below.
(d) Reserved.
(e) Payment Dates for Interest. The Interest payable on the Bonds as
provided above shall be payable on the following dates:
(1) Base Interest shall be payable (i) on each Interest Payment Date
for Base Interest, (ii) on each redemption date before the Conversion Date
(but only with respect to the Bonds redeemed), and (iii) on the Conversion
Date.
Page 2 of 8
================================================================================
<PAGE>
================================================================================
UNITED STATES OF AMERICA
[LOGO] [EAGLE SEAL] [LOGO]
[ILLEGIBLE] $5,075,000
(2) Contingent Interest and Deferred Interest that is payable on the
basis of Net Cash Flow shall be payable (i) on each Interest Payment Date
for Contingent Interest and Deferred Interest to and including the
Conversion Date, (Ii) on each redemption date during the Second Period and
the Third Period (but only with respect to the Bonds redeemed), (iii) on
each date on which Contingent Interest and Deferred Interest is payable
from Net Sale or Refinancing Proceeds (as provided in paragraph (e)(3)
below), and (iv) on the Conversion Date.
(3) Contingent Interest and Deferred Interest that is payable on the
basis of Net Sale or Refinancing Proceeds shall be payable on the next
Interest Payment Date for any interest succeeding by at least thirty (30)
days the date of the Event of Sale or Refinancing relating to the Sale of
the Project or Refinancing of the Project, except in the case of (x) a
Refinancing of the Project described in clause (i) or (iv) of the
definition thereof, in which case it shall be payable on the redemption
date or payment date, as the case may be, (y) a Sale of the Project
described in clause (i) of the definition thereof resulting in a call of
the Bonds for redemption pursuant to Section 4.01(f) of the Indenture, in
which case it shall be payable on the redemption date, or (z) a
Refinancing of the Project described in clause (ii) of the definition
thereof, in which case it shall be payable on the Initial Remarketing
Date.
(f) Calculation of Net Cash Flow.
(1) (i) No later than thirty (30) days before each payment date for
Contingent Interest and Deferred Interest specified in paragraph (e)(2)
above (or such lesser number of days as shall be the maximum number of
days possible if the payment date was not known until less than forty (40)
days before the payment date), the Developer shall calculate Net Cash Flow
for the three-month period ending on the last day of the third preceding
month before such payment date and shall provide the Trustee (but only
after the Trustee has accepted the duty to calculate interest pursuant to
the Indenture) and the Owners (if fewer than three) (i) the analysis of
such Net Cash Flow, (ii) unaudited financial statements of the Project for
such three-month period and (iii) a calculation of the amount of
Contingent Interest and Deferred Interest then payable.
(ii) Notwithstanding the foregoing in clause (i), (A) except
as may result from adjustments and reconciliation provided below in this
paragraph (f), the period of time for which Net Cash Flow is measured for
purposes of a payment date for Contingent Interest and Deferred Interest
on any Bonds specified in paragraph (e)(2) hereof shall not include any
time for which Net Cash Flow has been measured for purposes of a previous
payment date for Contingent Interest and Deferred Interest on such Bonds
specified in paragraph (e)(2) hereof, and (B) the calculation of Net Cash
Flow and the amount of Contingent Interest and Deferred Interest payable
therefrom on the Conversion Date shall be reconciled and adjusted to give
effect to the actual amount of Net Cash Flow for the current calendar year
(and the preceding calendar year if the Conversion Date falls before
delivery of the audit referred to in paragraph (f)(2) hereof in the
current calendar year) up to but not including the Conversion Date (such
actual amount of Net Cash Flow being measured by the actual amount known
as of the most recent possible date and an amount reasonably estimated to
be earned between such date and the Conversion Date) and all Contingent
Interest and Deferred Interest paid during the current calendar year (and
the preceding calendar year if the Conversion Date falls before delivery
of the audit referred to in paragraph (f)(2) hereof in the current
calendar year) in the manner described in paragraph (f)(3) below, except
that any underpayments or overpayments of Contingent Interest and Deferred
Interest shall he paid or refunded, as the case may be, on the Conversion
Date.
(iii) The amount of Net Cash Flow reflected in the analysis
described above, as adjusted in the case of the analysis in connection
with the Conversion Date, shall provide the basis for the calculation of
Contingent Interest and Deferred Interest payable on the basis of Net Cash
Flow on each payment date therefor specified in paragraph (e)(2) hereof,
except as provided below. The Trustee, upon direction of the owners of a
majority in principal amount of the Bonds (if it has accepted the duty to
calculate interest thereon pursuant to the Indenture), or the Owners of a
majority in principal amount of Bonds themselves, may request further
substantiation of the Developers calculation of Net Cash Flow and may
verify and correct as necessary the calculations thereof. If the Trustee
or the Owners of a majority in principal amount of the Bonds do so
reasonably modify such calculation, the Trustee or such Owners shall
notify the Developer of such modified calculation no later than ten (10)
Business Days before such payment date (or such lesser number of days as
shall be the maximum number of days practicable if the Trustee or such
Owners received the calculation of Net Cash Flow less than thirty (30)
days before the payment date) and such modified calculation shall be the
basis for the calculation of Contingent Interest and Deferred Interest
payable on the basis of Net Cash Flow on the payment date. Except to the
extent provided in this paragraph (f)(l) with respect to the Conversion
Date, the analysis and payment on the basis of Net Cash Flow described in
this paragraph (f)(l) is intended to provide a preliminary payment of
Contingent Interest and Deferred Interest on the basis of Net Cash Flow
prior and subject to the adjustment and reconciliation process described
in paragraphs (f)(2) and (f)(3) hereof.
(2) No later than March 15 of each calendar year (up to and, unless
the Conversion Date falls before delivery of the audit, including the
calendar year in which the Conversion Date occurs) the Developer shall
provide to the Issuer, the Trustee and the Owners of the Bonds (if fewer
than three) an audit of the operations of the Project for the preceding
calendar year prepared and certified by an Accountant acceptable to the
Trustee
Page 3 of 8
================================================================================
<PAGE>
================================================================================
UNITED STATES OF AMERICA
[LOGO] [EAGLE SEAL] [LOGO]
[ILLEGIBLE] $5,075,000
(if it has accepted the duty to calculate interest pursuant to the
Indenture) and the Owners (if fewer than three) in accordance with
generally accepted auditing standards. The audit shall state the actual
amount of Net Cash Flow for that calendar year and shall calculate all
Contingent Interest and Deferred Interest paid and payable from Net Cash
Flow during such calendar year pursuant hereto.
(3) The audit prepared as described in paragraph (f)(2) shall state
the amount of Contingent Interest and Deferred Interest payable and paid
during the subject calendar year. If the amounts of Contingent Interest
and Preferred Interest payable on the basis of Net Cash Flow (measured on
the basis of actual Net Cash Flow for such calendar year according to the
audit) exceeded the amount paid, then there shall be payable to the Owners
of the Bonds any such payable and unpaid amounts on the payment date for
Contingent Interest and Deferred Interest specified in paragraph (e)(2)
hereof immediately following the receipt by the Trustee and the said
Owners of the audit. If the amount of Contingent Interest and Deferred
Interest payable on the basis of Net Cash Flow (measured on the basis of
actual Net Cash Flow for such calendar year according to the audit) is
less than the amount actually paid, such overpaid amount shall be credited
against any other interest payments (whether Base Interest or Contingent
Interest and Deferred Interest) or other payments due from the Issuer to
the Owners of the Bonds on the Bond Payment Date (or Bond Payment Dates)
immediately following the receipt by the Trustee and the said Owners of
the audit and the Owners shall not be required to refund any such amount
unless the crediting does not exhaust the overpayment, in which case the
balance of the overpayment will be refunded by the Owners on the
Conversion Date.
(g) Fair Market Value of the Project for Purposes of Determining
Refinancing Proceeds.
(1) In order to calculate the fair market value of the Project for
purposes of determining Sale or Refinancing Proceeds in the event of a
Refinancing of the Project (other than a Refinancing of the Project
described in clause (iii) of the definition thereof) the fair market value
of the Project is required to be determined as set forth below, such
determination to be completed no later than fifteen (15) days before the
date on which Contingent Interest and Deferred Interest are payable on the
basis and to the extent of Net Sale or Refinancing Proceeds or as soon
thereafter as possible (but not after the said payment date if the notice
described in the following sentence cannot be given at the time
specified). The Developer shall give notice to the Trustee and to the
Owners of the Bonds of the impending Refinancing of the Project at least
ninety (90) days before the expected date of Refinancing of the Project or
as much notice as is possible, promptly upon learning of the impending
Refinancing of the Project. The Owners of all of the Bonds and the
Developer may jointly determine and agree upon the fair market value of
the Project but must do so at least sixty (60) days before the proposed
date of the Refinancing of the Project; failing such agreement the Owners
of a majority in principal amount of the Bonds shall select an independent
M.A.I. appraiser and the Developer shall select an independent M.A.I.
appraiser. The appraisers shall jointly determine and agree upon the fair
market value of the Project. If the two appraisers are unable to agree
upon the fair market value of the Project at least thirty (30) days before
the proposed date of the Refinancing of the Project, the Owners and the
Developer shall select a third independent M.A.I. appraiser. If such
Owners and the Developer are unable to agree upon a third appraiser by
such date, the two appraisers shall select the third appraiser. If the two
appraisers are unable to agree upon the third appraiser at least
twenty-five (25) days before the proposed date of the Refinancing of the
Project, such Owners or Developer may petition any court of competent
jurisdiction for the appointment of the third independent appraiser. As
early as practicable, but prior to the expected date of the Refinancing of
the Project, the third appraiser shall select from between the two
appraisals the one which the third appraiser believes to assess more
accurately the fair market value of the Project and the appraisal so
selected shall be the fair market value of the Project, shall provide the
basis for the calculation of Contingent Interest and Deferred Interest
payable on the basis of Net Sale or Refinancing Proceeds in the event of a
Refinancing of the Project (other than a Refinancing of the Project
described in clause (iii) of the definition thereof) on each payment date
therefor specified in paragraph (e)(3) hereof and shall be binding upon
the Developer and the Owners of the Bonds. The fees and expenses of the
appraiser selected by each party shall be borne by the party selecting the
appraiser and the cost of the third appraiser shall be borne equally by
the Developer and the Owners of the Bonds.
(2) The fair market value of the Project for purposes of this
paragraph (g) shall reflect the amount each appraiser believes an informed
and willing purchaser under no compulsion to purchase the Project would
pay to an informed and willing seller under no compulsion to sell the
Project, less those costs of a sale appropriate to the marketplace within
which the Project would be sold. Such determination shall take into
consideration such factors as the appraisers may deem relevant. Except as
provided below, the fair market value of the Project set forth in an
appraisal shall he determined as of the date of such appraisal.
(3) If the Refinancing of the Project is based upon a redemption of
Bonds pursuant to Section 4.01(d) of the Indenture, the fair market value
of the Project shall be determined as of the day before the occurrence of
any events requiring the payment of Insurance Proceeds or a Condemnation
Award, as if such events had not occurred and were not anticipated.
Page 4 of 8
================================================================================
<PAGE>
================================================================================
UNITED STATES OF AMERICA
[LOGO] [EAGLE SEAL] [LOGO]
[ILLEGIBLE] $5,075,000
(h) Interest During a Variable Rate Period. From and after the Initial
Remarketing Date, if all of the Bonds then Outstanding have been remarketed as
provided in the Indenture and in accordance herewith, the Bonds shall bear
interest at a rate determined as follows:
(1) On a Business Day not prior to ten (10) Business Days prior to
the Initial Remarketing Date and each subsequent Remarketing Date, the
Remarketing Agent, having due regard to prevailing market conditions,
shall determine the interest rate (the "Variable Rate") which, if borne by
the Remarketed Bonds on such date, would be the interest rate, but would
not exceed the interest rate, which would result in the market value of
the Remarketed Bonds on such day (as if such day were the first day of
such Remarketing Period) being 100% of the principal amount thereof
(together with interest if any, accrued thereon; provided, however, that
in no event shall the Variable Rate exceed 14.5% per annum or the maximum
lawful rate, whichever is less. If for any reason the Variable Rate so
determined by the Remarketing Agent shall be held to be invalid or
unenforceable by a court of competent jurisdiction, the Remarketing Agent
shall determine the interest rate for such Remarketing Period, which shall
be a percentage of the 30 Revenue Bond Index (as published in The Bond
Buyer; or if such Index is not available, an index comparable to such
Index, in the judgment of the Remarketing Agent) for the most recent
period for which information is available, computed in accordance with the
following table:
If the length of the But the length of the The applicable percentage
Remarketing Period (in Remarketing Period (in of the 30 Revenue Bond
years) is at least: years) is less than: Index is:
- --------------------------------------------------------------------------------
5 or greater (N.A.) 85%
1 5 80
The Remarketing Agent shall promptly, upon the determination of the
Variable Rate, notify the Issuer, the Developer, the Owners and the
Trustee of the Variable Rate. The determination of the Variable Rate for a
Remarketing Period shall be conclusive and binding upon the Owners of the
Bonds, the Issuer, the Trustee and the Developer. The Trustee shall
immediately give written notice (which may include written notice by
electronic means) to the Owners of all of the Bonds of the Variable Rate
for the period between the next succeeding Remarketing Date and the second
succeeding Remarketing Date.
(2) No more than sixty (60) days, but at least forty-five (45) days,
prior to the Initial Remarketing Date, the Developer shall notify the
Owners (if no more than three), the Trustee and the Remarketing Agent of
the length of the proposed Remarketing Period commencing on the Initial
Remarketing Date, which shall extend for one (1) or more years. Subsequent
to the Initial Remarketing Date, the Developer will establish subsequent
Remarketing Dates as follows: no more than sixty (60) days, but at least
forty-five (45) days, prior to each Remarketing Date, the Developer will
notify the Owners of the Bonds, the Issuer, the Trustee and the
Remarketing Agent of the proposed subsequent Remarketing Date, which shall
be one (1) or more years from the next Remarketing Date. The Developer
shall also specify the interest payment dates if different than January 1
and July 1; provided that the interest payment dates specified may be no
more frequent than once each month.
(3) Notice of the Remarketing Date shall be given by the Trustee not
later than the twenty-fifth (25th) day preceding such Remarketing Date by
registered or certified mail to the Owners of all Outstanding Bonds and
such notice shall state that the Bonds are subject to mandatory tender on
the Remarketing Date, unless the Owner thereof waives such tender, shall
indicate the subsequent Remarketing Date, if any, and shall include a form
to indicate the election not to tender Bonds.
(4) Interest on the Bonds during the Variable Rate Period shall be
payable on each Interest Payment Date therefor and shall be calculated, to
the extent allowed by applicable law, on the basis of a year of 365 days
and the actual number of days elapsed.
Notwithstanding anything elsewhere contained in this Bond, (a) total Interest
paid on this Bond (including any Interest payable in accordance with Section
7.10 of the Indenture), cumulative from the original date of issuance of the
Bond, shall not exceed the sum of 13.25% per annum, simple and noncompounded for
each year (calculated on the basis of a 365-day year, actual number of days
elapsed) from such date of issuance to the date of calculation; and (b) if the
interest rate on this Bond shall at any time be deemed to be in excess of the
maximum rate allowed by law then the Bond shall instead bear interest at the
maximum rate permitted by such law. Any excess payment of such interest shall be
deemed to be a credit against the unpaid principal amount of this Bond.
The foregoing interest provisions are a summary of those contained in the
Indenture, and reference is hereby made to the Indenture for a full statement of
their terms, which are incorporated herein by reference.
Limited Recourse. Pursuant to a Loan Agreement dated as of December 1,
1986, as amended by a First Amendment to Loan Documents dated as of September 8,
1999 (as amended, the "Loan Agreement"), and a Promissory Note dated as of
December 1, 1986, as amended and supplemented by an Allonge to Promissory Note
dated as of
Page 5 of 8
================================================================================
<PAGE>
================================================================================
UNITED STATES OF AMERICA
[LOGO] [EAGLE SEAL] [LOGO]
[ILLEGIBLE] $5,075,000
September 8, 1999 (as amended and supplemented, the "Note"), and a Deed of Trust
dated as of December 1, 1986, as amended by the First Amendment to Loan
Documents dated as of September 8, 1999 (as amended, the "Deed of Trust")
securing the Note, Crowne Pointe Associates Limited Partnership, a Washington
Limited Partnership ("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 DEED OF
TRUST AND THE ASSIGNMENT OF LEASES AND RENTS CONTAINED THEREIN, ALL OF WHICH
HAVE BEEN ASSIGNED TO THE TRUSTEE PURSUANT TO THE INDENTURE AND AN ASSIGNMENT
AGREEMENT FROM THE ISSUER DATED OF DECEMBER 1, 1986, AND (II) ANY ADDITIONAL
SECURITY PROVIDED IN THE INDENTURE. THE OBLIGATIONS OF THE DEVELOPER UNDER THE
LOAN AGREEMENT, THE NOTE AND THE DEED OF TRUST ARE NON-RECOURSE TO THE
DEVELOPER, AND ARE ENFORCEABLE SOLELY AGAINST THE PROJECT, EXCEPT AS OTHERWISE
PROVIDED THEREIN. ANY PAYMENTS MADE ON THE MORTGAGE LOAN TO THE OWNER OF THIS
BOND SHALL BE FOR THE ACCOUNT OF THE ISSUER AND SHALL DISCHARGE THE ISSUER'S
OBLIGATIONS ON THIS BOND TO THE EXTENT OF SUCH PAYMENT, APPLYING ANY PAYMENT TO
INTEREST FIRST.
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
hereto.
Prior to the Conversion Date a Bond may only be transferred (i) to any
affiliate of the Partnership, to an affiliate with the same or substantially the
same general partners as the Partnership, to any entity arising out of any
merger or consolidation of the Partnership by operation of law, or to a trustee
in bankruptcy of the Partnership; (ii) by an assignment to a bank or other
financial institution issuing a letter of credit or like instrument in
connection with the Mortgage Loan; or (iii) to one or more Institutional
Investors if, in each instance, the Issuer and the Trustee receive from the
transferee (A) its agreement to the transfer restrictions set forth in this
paragraph in connection with subsequent transfers of the Bond, and (B) evidence
of the assignment by the transferor to the transferee (or if there is to be
thereafter more than one Owner of the Bonds, evidence of the appointment and
acceptance of a Trustee and assignment of the Trustee) of the transferor's
rights in and to the Mortgage Loan and the other rights and interests as
theretofore conveyed to it by the Assignment, or an assignment of the
Assignment.
The Bonds are issuable as fully registered Bonds in Authorized
Denominations as provided in the Indenture.
Redemption of Bonds, The Bonds are subject to 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 amid in such manner as is set forth in
the Indenture.
Remarketing in Lieu of Redemption of Bonds on Initial Remarketing Date.
Upon an election by the Owner of a redemption in whole of the Bonds pursuant to
Section 4.01(h) of the Indenture, at the direction of the Developer given not
less than sixty (60) days in advance, either (i) the Bonds shall be redeemed on
the date specified in the notice to the Issuer, the Trustee, and the Developer
from the Owners described in Section 4.01(h) of the Indenture or (ii) the Bonds
will be deemed tendered for purchase and remarketed as provided in Article V of
the Indenture on the date specified in the notice to the Issuer, the Trustee,
and the Developer from the Owner described in Section 4.01(h), or on such
earlier Interest Payment Date selected by the Developer in its direction to
remarket the Bonds but in no event before the first Interest Payment Date
following the Reference Month in 2011. The Bonds may only be remarketed if the
conditions specified in the Indenture are met which conditions include
requirements that either the Bonds be rated and that certain disclosures be made
in connection with such remarketing or that the remarketing be limited to
certain institutional investors who shall agree to restrictions on the transfer
thereof. The purchase price of Bonds so remarketed in lieu of redemption shall
be the principal amount thereof together with all accrued and unpaid Interest
(including all Base Interest, Contingent Interest and Deferred Interest then
payable) and shall be payable on the Initial Remarketing Date. If the conditions
to remarketing of the Bonds set forth in Article V of the Indenture are not
satisfied, or if the Bonds are not successfully remarketed, or if the full
purchase price thereof is not paid on the Initial Remarketing Date, or if all
Interest (including Contingent Interest and Deferred Interest then payable) and
principal payable on the Bonds up to and including the Initial Remarketing Date
has not been fully paid, then all Bonds tendered shall be redeemed and not
remarketed pursuant to Section 4.01(e) of the Indenture.
Mandatory Tender of Bonds. The Bonds shall be subject to mandatory tender
to the Remarketing Agent on each Remarketing Date after the Initial Remarketing
Date for purchase by the Remarketing Agent, at a purchase price equal to the
principal amount thereof plus accrued Interest to the purchase date; provided,
however, that there need not be tendered on such Remarketing Date any Bonds with
respect to which the Remarketing Agent shall have received from the Owners
thereof a written notice at least five (5) Business Days prior to the applicable
Remarketing Date expressly electing not to tender their Bonds for purchase. Any
such election may not relate to a portion of any Bond held by the Owner, such
election may apply only to the entire principal amount of any Bond or Bonds.
Page 6 of 8
================================================================================
<PAGE>
================================================================================
UNITED STATES OF AMERICA
[LOGO] [EAGLE SEAL] [LOGO]
[ILLEGIBLE] $5,075,000
Tendered Bonds. Any Bonds that are the subject of mandatory tender for
purchase but are not the subject of elections to retain the Bonds received by
the Remarketing Agent in a timely fashion shall be conclusively deemed tendered
for purchase on the Remarketing Date. If the Owner selects a redemption date for
redemption of the Bonds in accordance with Section 4.01(h) of the Indenture and
the Developer makes the remarketing election permitted by Section 4.04 of the
Indenture, all Bonds shall be conclusively deemed tendered for purchase on the
Initial Remarketing Date. All Bonds that are actually tendered for purchase
pursuant to the Indenture or are deemed tendered for purchase on a Remarketing
Date, including the Initial Remarketing Date, shall constitute tendered Bonds
for purposes of the Indenture; all tendered Bonds that are not actually
delivered for purchase on a Remarketing Date, including the Initial Remarketing
Date shall constitute "Undelivered Bonds" for purposes of the Indenture.
Undelivered Bonds that have been remarketed in accordance with the Indenture
shall be deemed to have been purchased if the purchase price therefor shall have
been deposited therefor and held by the Remarketing Agent; and the parties to
whom the Remarketing Agent shall have remarketed Undelivered Bonds so remarketed
shall be the owners of such Undelivered Bonds for all purposes under the
Indenture, including without limitation the right to transfer such Bonds.
Interest accruing from and after the Remarketing Date on such Undelivered Bonds
shall no longer be payable to the former Owners thereof but shall be paid to the
new registered owners thereof. Former Owners of Undelivered Bonds so remarketed
shall not be deemed to be Owners of Bonds under the Indenture, and such
Undelivered Bonds shall not be deemed Outstanding for purposes of the Indenture,
except for purposes of payment of the purchase price of such Undelivered Bonds
upon surrender thereof to the Remarketing Agent.
Enforcement. Only the Acting Party 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 (together with all unpaid Interest thereon) may be declared due and
payable by the Acting Party upon the conditions and in the manner and with the
effect 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.
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 certain
purposes, including 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.
By its acceptance of this Bond, the Owner hereof agrees that it will be
bound by and accepts the provisions of the Indenture and the Loan Documents (as
defined in the Loan Agreement). 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 Constitution or 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 Constitution or
statutes.
IN WITNESS WHEREOF, the Washington State Housing Finance Commission has
caused this Bond to be executed in its name with the signature of its Chairman
and attested by the signature of its Secretary, and its corporate seal to be
hereunto impressed, all as of the 8th day of September, 1999.
WASHINGTON STATE HOUSING
[SEAL] FINANCE COMMISSION
By /s/ Bosse Nutley
------------------------------
Ms. Bosse Nutley
Chair
Attest:
/s/ Michael J. Murphy
- ----------------------------
Michael J. Murphy
Secretary
Page 7 of 8
================================================================================
<PAGE>
================================================================================
UNITED STATES OF AMERICA
[LOGO] [EAGLE SEAL] [LOGO]
[ILLEGIBLE] $5,075,000
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the within mentioned Indenture
and is one of the Multifamily Housing Mortgage Revenue Bonds, Series 1986
(Crowne Pointe Apartments Project) of the Washington State Housing Finance
Commission.
Date of Authentication: September 8, 1999
CHASE MANHATTAN TRUST COMPANY,
NATIONAL ASSOCIATION,
Trustee and Bond Registrar
By: /s/ Cheryl McDonald
--------------------------------
Cheryl McDonald
Authorized Signatory
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _______________________ the within Multifamily Housing Mortgage Revenue
Bond, Series 1986 (Crowne Pointe Apartments Project), of the Washington State
Housing Finance Commission, and hereby authorizes the transfer of this Bond on
the registration books of the Trustee.
Dated ___________________________________
_________________________________________
Authorized Signature
_________________________________________
Name of Transferor
Signature Guaranteed by:
_________________________________________
_________________________________________
Name of Bank
By: _____________________________________
Title: __________________________________
Page 8 of 8
================================================================================
Exhibit 10 (aaaaag)
================================================================================
UNITED STATES OF AMERICA
[LOGO] [EAGLE SEAL] [LOGO]
[ILLEGIBLE] $13,000,000
STATE OF WASHINGTON
WASHINGTON STATE HOUSING FINANCE COMMISSION
MULTIFAMILY HOUSING MORTGAGE REVENUE BOND, SERIES 1987
(NEWPORT VILLAGE APARTMENTS PROJECT)
DATED DATE: FEBRUARY 11, 1987
MATURITY DATE: AUGUST 31,2029
REGISTERED OWNER: CHARTERMAC OWNER TRUST 1
PRINCIPAL AMOUNT: THIRTEEN MILLION AND NO/100 DOLLARS
The Washington State Housing Finance Commission (the "Issuer"), a public
body corporate and politic and an instrumentality of the State of Washington
(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 Chase Manhattan Trust Company, National Association (the "Trustee") in
Seattle, Washington, as successor in trust to Seattle Trust and Savings Bank
(the "Original Trustee"), or its successor as Trustee, under the Indenture
(described below), the principal amount stated above, and to pay Interest on
said principal amount, from and including the dated date hereof until the
principal amount shall have been paid in accordance with the terms of this Bond,
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.
Payments made on the Mortgage Loan to the Owner of this Bond shall be for the
account of the Issuer, shall constitute payments on this Bond and shall
discharge the Issuer's obligations on this Bond to the extent of such payments,
applying any payments first to Interest payable on the due date of such payment
and thereafter to principal and premium, if any.
This Bond is one of a series of Bonds (the "Bonds") issued pursuant to the
Multifamily Housing Mortgage Revenue Bond (Newport Village Apartments Project)
Trust Indenture between the Original Trustee and the Issuer (the "Original
Indenture") dated as of February 1, 1987, as amended and supplemented by a First
Supplemental Indenture (the "Supplemental Indenture") dated as of September 8,
1999 (the "Amendment Date") between the Issuer and the Trustee (which Original
Indenture, as amended by the Supplemental Indenture and as from time to time
further amended and supplemented, is hereby referred to as the "Indenture"), and
Ch. 161, Laws of Washington 1983, 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 shall have the
respective meanings accorded such terms in the Indenture. The Bonds issued under
the Indenture are expressly limited to $13,000,000 principal amount at any time
Outstanding and are all of like tenor, except as to numbers and denominations,
and are issued for the purpose of providing construction and permanent financing
for qualified multifamily rental housing units in the State and of paying
certain expenses incidental thereto.
PAYMENT OF THE PRINCIPAL OF, INTEREST ON, AND REDEMPTION PREMIUM, IF ANY,
ON THE BONDS, SHALL BE A VALID CLAIM ONLY AS AGAINST THE SPECIAL FUND OR FUNDS
RELATING THERETO, IS NOT AN OBLIGATION OF THE STATE OR ANY MUNICIPAL
CORPORATION, SUBDIVISION OR AGENCY OF THE STATE OTHER THAN THE COMMISSION, AND
NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF WASHINGTON OR
ANY MUNICIPAL CORPORATION, SUBDIVISION OR AGENCY OF THE STATE, IS PLEDGED TO THE
PAYMENT OF THE PRINCIPAL OF, INTEREST ON AND REDEMPTION PREMIUM, IF ANY, ON THE
BONDS.
Interest on the Bonds.
(a) General. The Bonds shall bear interest as provided below.
(b) Base Interest. Until the Conversion Date, the Bonds shall bear base
interest calculated and payable as follows (which interest is referred to herein
as "Base Interest"):
(1) During the Initial Period, the Bonds shall bear Base Interest at
a rate equal to 9.0% per annum payable on each payment date specified in
paragraph (e)(l) below.
(2) During the Second Period, the Bonds shall bear Base Interest at
a rate equal to 8.0% per annum to (but not including) the Amendment Date,
and 7.25% per annum thereafter, payable on each payment date specified in
paragraph (e)(1) below.
(3) Accrued and unpaid Base Interest in the amount of $237,358 as of
the Amendment Date (which amount is referred to as the "Base Deferred
Interest Amount") shall be deferred without interest until
Page 1 of 8
================================================================================
<PAGE>
================================================================================
UNITED STATES OF AMERICA
[LOGO] [EAGLE SEAL] [LOGO]
[ILLEGIBLE] $13,000,000
paid. The Base Deferred Interest Amount shall be payable subsequent to the
Amendment Date on the earliest possible payment dates specified in
paragraph (e)(3) below on the basis and to the extent of 100% of Net Sale
or Refinancing Proceeds, after the payment of accrued and unpaid Base
Interest (and interest thereon) other than the Base Deferred Interest
Amount, and prior to the payment of Deferred Interest and Contingent
Interest.
Notwithstanding that the Base Deferred Interest Amount shall be deferred
without interest until paid as provided in this paragraph (b)(3), any Base
Interest due and payable from and after the Amendment Date which remains
unpaid from time to time (specifically excluding the Base Deferred
Interest Amount) shall accrue interest thereon as provided in Section 7.10
of the Indenture.
Base Interest shall be calculated on the basis of a year of 365 days, actual
days elapsed.
(c) Contingent Interest. During the Initial Period and the Second Period
and until the Conversion Date, the Bonds also shall bear interest calculated and
payable as follows:
(1) During each year or part thereof of the Second Period, to (but
not including) the Amendment Date, the Bonds bore Contingent Interest (as
defined in the Original Indenture) at an annual rate equal to the Primary
Contingent Interest Rate (as defined in the Original Indenture) payable on
the basis and to the extent of 100% of Net Cash Flow for each such year,
or part thereof, or, to the extent not fully paid on or before the
Amendment Date because 100% of Net Cash Flow was insufficient, on the
basis and to the extent of 100% of Net Sale or Refinancing Proceeds.
Contingent Interest equal to Maximum Primary Contingent Interest (as
defined in the Original Indenture) was payable on the Bonds on each
payment date specified in paragraph (e)(2) below on the basis and to the
extent of 100% of Net Cash Flow, measured for purposes of such payment and
subject to the adjustments and reconciliation as specified in paragraph
(1) below. If 100% of Net Cash Flow was insufficient to pay the Maximum
Primary Contingent Interest on such dates, then there was payable the
maximum amount possible to the extent of 100% of Net Cash Flow (which
amount was referred to as the "Primary Contingent Interest").
The difference between the Maximum Primary Contingent Interest and
the Primary Contingent Interest was deferred with interest thereon at 9.0%
per annum, compounded annually, with respect to all such interest accrued
and unpaid to (but not including) the Amendment Date (such difference
together with the compounded interest thereon was referred to collectively
with all such amounts previously deferred and unpaid as "Primary Deferred
Interest").
All Primary Deferred Interest (in the agreed approximate amount of
$1,573,484) which remains accrued and unpaid as of the Amendment Date is
hereby forgiven, abrogated and discharged. From and after the Amendment
Date, no further Maximum Primary Contingent Interest shall accrue or be
due or payable.
(2) During each year or part thereof, to (but not including) the
Amendment Date, the Bonds bore Contingent Interest at an annual rate equal
to the Supplemental Contingent Interest Rate payable on the basis and to
the extent of 25% of so much of Net Cash Flow for each such year, or part
thereof, as remained after reducing Net Cash Flow by the amount of any
payments on the basis of Net Cash Flow specified above in paragraph
(c)(l). As of the Amendment Date, no Supplemental Contingent Interest (as
defined below) has been paid, and all such interest remains accrued and
unpaid.
From and after the Amendment Date and to the Conversion Date,
Contingent Interest equal to Maximum Supplemental Contingent Interest
shall continue to be payable on the Bonds on each payment date specified
in paragraph (e)(2) below on the basis and to the extent of 25% of Net
Cash Flow, measured for purposes of such payment and subject to the
adjustments and reconciliation as specified in paragraph (f) below. If 25%
of Net Cash Flow is insufficient to pay the Maximum Supplemental
Contingent Interest payable on any payment date specified in paragraph
(e)(2) below, then there shall be payable the maximum amount possible on
the basis and to the extent of 25% of Net Cash Flow (which amount is
referred to as the "Supplemental Contingent Interest").
The difference between the Maximum Supplemental Contingent Interest
and the Supplemental Contingent Interest shall be deferred without
interest (such difference is referred to collectively with all such
amounts previously deferred and unpaid, including amounts deferred and
unpaid prior to the Amendment Date, as the "Supplemental Deferred
Interest") and shall thereafter be payable on the earliest possible
payment dates specified in paragraph (e)(2) below on the basis and to the
extent of 25% of Net Cash Flow, measured for purposes of such payment and
subject to the adjustments and reconciliation as specified in paragraph
(f) below. Supplemental Deferred Interest shall be paid on the basis and
to the extent of 25% of Net Cash Flow before any Supplemental Contingent
Interest is paid on such basis.
To the extent that Maximum Supplemental Contingent Interest and all
Supplemental Deferred Interest are not fully paid on the basis and to the
extent of 25% of Net Cash Flow on payment dates specified in paragraph
(e)(2) below, they shall be payable on the basis and to the extent of 25%
of Net Sale or Refinancing Proceeds on the earliest possible payment dates
specified in paragraph (e)(3) below.
Page 2 of 8
================================================================================
<PAGE>
================================================================================
UNITED STATES OF AMERICA
[LOGO] [EAGLE SEAL] [LOGO]
[ILLEGIBLE] $13,000,000
(d) Reserved.
(e) Payment Dates for Interest. The Interest payable on the Bonds as
provided above shall be payable on the following dates:
(1) Base Interest shall be payable (i) on each Interest Payment Date
for Base Interest, (ii) on each redemption date before the Conversion Date
(but only with respect to the Bonds redeemed), and (iii) on the Conversion
Date.
(2) Contingent Interest and Deferred Interest that is payable on the
basis of Net Cash Flow shall be payable (i) on each Interest Payment Date
for Contingent Interest and Deferred Interest to and including the
Conversion Date, (ii) on each redemption date during the Second Period and
the Third Period (but only with respect to the Bonds redeemed), (iii) on
each date on which Contingent Interest and Deferred Interest is payable
from Net Sale or Refinancing Proceeds (as provided in paragraph (e)(3)
below), and (iv) on the Conversion Date.
(3) Contingent Interest and Deferred Interest that is payable on the
basis of Net Sale or Refinancing Proceeds shall be payable on the next
Interest Payment Date for any interest succeeding by at least thirty (30)
days the date of the Event of Sale or Refinancing relating to the Sale of
the Project or Refinancing of the Project, except in the case of (x) a
Refinancing of the Project described in clause (i) or (iv) of the
definition thereof, in which case it shall be payable on the redemption
date or payment date, as the case may be, (y) a Sale of the Project
described in clause (i) of the definition thereof resulting in a call of
the Bonds for redemption pursuant to Section 4.01(f) of the Indenture, in
which case it shall be payable on the redemption date, or (z) a
Refinancing of the Project described in clause (ii) of the definition
thereof, in which case it shall be payable on the Initial Remarketing
Date.
(f) Calculation of Net Cash Flow.
(1) (i) No later than thirty (30) days before each payment date for
Contingent Interest and Deferred Interest specified in paragraph (e) (2)
above (or such lesser number of days as shall be the maximum number of
days possible if the payment date was not known until less than forty (40)
days before the payment date), the Developer shall calculate Net Cash Flow
for the three-month period ending on the last day of the third preceding
month before such payment date and shall provide the Trustee (but only
after the Trustee has accepted the duty to calculate interest pursuant to
the Indenture) and the Owners (if fewer than three) (i) the analysis of
such Net Cash Flow, (ii) unaudited financial statements of the Project for
such three-month period and (iii) a calculation of the amount of
Contingent Interest and Deferred Interest then payable.
(ii) Notwithstanding the foregoing in clause (i), (A) except
as may result from adjustments and reconciliation provided below in this
paragraph (f), the period of time for which Net Cash Flow is measured for
purposes of a payment date for Contingent Interest and Deferred Interest
on any Bonds specified in paragraph (e)(2) hereof shall not include any
time for which Net Cash Flow has been measured for purposes of a previous
payment date for Contingent Interest and Deferred Interest on such Bonds
specified in paragraph (e)(2) hereof, and (B) the calculation of Net Cash
Flow and the amount of Contingent Interest and Deferred Interest payable
therefrom on the Conversion Date shall be reconciled and adjusted to give
effect to the actual amount of Net Cash Flow for the current calendar year
(and the preceding calendar year if the Conversion Date falls before
delivery of the audit referred to in paragraph (f)(2) hereof in the
current calendar year) up to but not including the Conversion Date (such
actual amount of Net Cash Flow being measured by the actual amount known
as of the most recent possible date and an amount reasonably estimated to
be earned between such date and the Conversion Date) and all Contingent
Interest and Deferred Interest paid during the current calendar year (and
the preceding calendar year if the Conversion Date falls before delivery
of the audit referred to in paragraph (f)(2) hereof in the current
calendar year) in the manner described in paragraph (f)(3) below, except
that any underpayments or overpayments of Contingent Interest and Deferred
Interest shall be paid or refunded, as the case may be, on the Conversion
Date.
(iii) The amount of Net Cash Flow reflected in the analysis
described above, as adjusted in the case of the analysis in connection
with the Conversion Date, shall provide the basis for the calculation of
Contingent Interest and Deferred Interest payable on the basis of Net Cash
Flow on each payment date therefor specified in paragraph (e)(2) hereof,
except as provided below. The Trustee, upon direction of the owners of a
majority in principal amount of the Bonds (if it has accepted the duty to
calculate interest thereon pursuant to the Indenture), or the Owners of a
majority in principal amount of Bonds themselves, may request further
substantiation of the Developer's calculation of Net Cash Flow and may
verify and correct as necessary the calculations thereof. If the Trustee
or the Owners of a majority in principal amount of the Bonds do so
reasonably modify such calculation, the Trustee or such Owners shall
notify the Developer of such modified calculation no later than ten (10)
Business Days before such payment date (or such lesser number of days as
shall be the maximum number of days practicable if the Trustee or such
Owners received the calculation of Net Cash Flow less than thirty (30)
days before the payment date) and such modified calculation shall be the
basis for the calculation of Contingent Interest and Deferred Interest
payable on the basis of Net Cash Flow on the payment date. Except to the
extent provided in this paragraph (f)(l) with respect to the Conversion
Date, the
Page 3 of 8
================================================================================
<PAGE>
================================================================================
UNITED STATES OF AMERICA
[LOGO] [EAGLE SEAL] [LOGO]
[ILLEGIBLE] $13,000,000
analysis and payment on the basis of Net Cash Flow described in this
paragraph (f)(1) is intended to provide preliminary payment of Contingent
Interest and Deferred Interest on the basis of Net Cash Flow prior and
subject to the adjustment and reconciliation process described in
paragraphs (f)(2) and (f)(3) hereof.
(2) No later than March 15 of each calendar year (up to and, unless
the Conversion Date falls before delivery of the audit, including the
calendar year in which the Conversion Date occurs) the Developer shall
provide to the Issuer, the Trustee and the Owners of the Bonds (if fewer
than three) an audit of the operations of the Project for the preceding
calendar year prepared and certified by an Accountant acceptable to the
Trustee (if it has accepted the duty to calculate interest pursuant to the
Indenture) and the Owners (if fewer than three) in accordance with
generally accepted auditing standards. The audit shall state the actual
amount of Net Cash Flow for that calendar year and shall calculate all
Contingent Interest and Deferred Interest paid and payable from Net Cash
Flow during such calendar year pursuant hereto.
(3) The audit prepared as described in paragraph (f)(2) shall state
the amount of Contingent Interest and Deferred Interest payable and paid
during the subject calendar year. If the amounts of Contingent Interest
and Deferred Interest payable on the basis of Net Cash Flow (measured on
the basis of actual Net Cash Flow for such calendar year according to the
audit) exceeded the amount paid, then there shall be payable to the Owners
of the Bonds any such payable and unpaid amounts on the payment date for
Contingent Interest and Deferred Interest specified in paragraph (e)(2)
hereof immediately following the receipt by the Trustee and the said
Owners of the audit. If the amount of Contingent Interest and Deferred
Interest payable on the basis of Net Cash Flow (measured on the basis of
actual Net Cash Flow for such calendar year according to the audit) is
less than the amount actually paid, such overpaid amount shall be credited
against any other interest payments (whether Base Interest or Contingent
Interest and Deferred Interest) or other payments due from the Issuer to
the Owners of the Bonds on the Bond Payment Date (or Bond Payment Dates)
immediately following the receipt by the Trustee and the said Owners of
the audit and the Owners shall not be required to refund any such amount
unless the crediting does not exhaust the overpayment, in which case the
balance of the overpayment will be refunded by the Owners on the
Conversion Date,
(g) Fair Market Value of the Project for Purposes of Determining
Refinancing Proceeds.
(1) In order to calculate the fair market value of the Project for
purposes of determining Sale or Refinancing Proceeds in the event of a
Refinancing of the Project (other than a Refinancing of the Project
described in clause (iii) of the definition thereof) the fair market value
of the Project is required to be determined as set forth below, such
determination to be completed no later than fifteen (15) days before the
date on which Contingent Interest and Deferred Interest are payable on the
basis and to the extent of Net Sale or Refinancing Proceeds or as soon
thereafter as possible (but not after the said payment date if the notice
described in the following sentence cannot be given at the time
specified). The Developer shall give notice to the Trustee and to the
Owners of the Bonds of the impending Refinancing of the Project at least
ninety (90) days before the expected date of Refinancing of the Project or
as much notice as is possible, promptly upon learning of the impending
Refinancing of the Project. The Owners of all of the Bonds and the
Developer may jointly determine and agree upon the fair market value of
the Project but must do so at least sixty (60) days before the proposed
date of the Refinancing of the Project; failing such agreement the Owners
of a majority in principal amount of the Bonds shall select an independent
M.A.I. appraiser and the Developer shall select an independent M.A.I.
appraiser. The appraisers shall jointly determine and agree upon the fair
market value of the Project. If the two appraisers are unable to agree
upon the fair market value of the Project at least thirty (30) days before
the proposed date of the Refinancing of the Project, the Owners and the
Developer shall select a third independent M.A.I. appraiser. If such
Owners and the Developer are unable to agree upon a third appraiser by
such date, the two appraisers shall select the third appraiser. If the two
appraisers are unable to agree upon the third appraiser at least
twenty-five (25) days before the proposed date of the Refinancing of the
Project, such Owners or Developer may petition any court of competent
jurisdiction for the appointment of the third independent appraiser. As
early as practicable, but prior to the expected date of the Refinancing of
the Project, the third appraiser shall select from between the two
appraisals the one which the third appraiser believes to assess more
accurately the fair market value of the Project and the appraisal so
selected shall be the fair market value of the Project, shall provide the
basis for the calculation of Contingent Interest and Deferred Interest
payable on the basis of Net Sale or Refinancing Proceeds in the event of a
Refinancing of the Project (other than a Refinancing of the Project
described in clause (iii) of the definition thereof) on each payment date
therefor specified in paragraph (e)(3) hereof and shall be binding upon
the Developer and the Owners of the Bonds. The fees and expenses of the
appraiser selected by each party shall be borne by the party selecting the
appraiser and the cost of the third appraiser shall be borne equally by
the Developer and the Owners of the Bonds.
(2) The fair market value of the Project for purposes of this
paragraph (g) shall reflect the amount each appraiser believes an informed
and willing purchaser under no compulsion to purchase the Project would
pay to an informed and willing seller under no compulsion to sell the
Project, less those costs of a sale appropriate to the marketplace within
which the Project would be sold. Such determination shall take into
Page 4 of 8
================================================================================
<PAGE>
================================================================================
UNITED STATES OF AMERICA
[LOGO] [EAGLE SEAL] [LOGO]
[ILLEGIBLE] $13,000,000
consideration such factors as the appraisers may deem relevant. Except
as provided below, the fair market value of the Project set forth in an
appraisal shall be determined as of the date of such appraisal.
(3) If the Refinancing of the Project is based upon a redemption of
Bonds pursuant to Section 401(d) of the Indenture, the fair market value
of the Project shall be determined as of the day before the occurrence of
any events requiring the payment of Insurance Proceeds or a Condemnation
Award, as if such events had not occurred and were not anticipated.
(h) Interest During a Variable Rate Period. From and after the Initial
Remarketing Date, if all of the Bonds then Outstanding have been remarketed as
provided in the Indenture and in accordance herewith, the Bonds shall bear
interest at a rate determined as follows:
(1) On a Business Day not prior to ten (10) Business Days prior to
the Initial Remarketing Date and each subsequent Remarketing Date, the
Remarketing Agent, having due regard to prevailing market conditions,
shall determine the interest rate (the "Variable Rate") which, if borne by
the Remarketed Bonds on such date, would be the interest rate, but would
not exceed the interest rate, which would result in the market value of
the Remarketed Bonds on such day (as if such day were the first day of
such Remarketing Period) being 100% of the principal amount thereof
(together with interest if any, accrued thereon; provided, however, that
in no event shall the Variable Rate exceed 14.5% per annum or the maximum
lawful rate, whichever is less, If for any reason the Variable Rate so
determined by the Remarketing Agent shall be held to be invalid or
unenforceable by a court of competent jurisdiction, the Remarketing Agent
shall determine the interest rate for such Remarketing Period, which shall
be a percentage of the 30 Revenue Bond Index (as published in The Bond
Buyer or if such Index is not available, an index comparable to such
Index, in the judgment of the Remarketing Agent) for the most recent
period for which information is available, computed in accordance with the
following table:
If the length of the But the length of the The applicable percentage
Remarketing Period (in Remarketing Period (in of the 30 Revenue Bond
years) is at least: years) is less than: Index is:
- --------------------------------------------------------------------------------
5 or greater (NA.) 85%
1 5 80
The Remarketing Agent shall promptly, upon the determination of the
Variable Rate, notify the Issuer, the Developer, the Owners and the
Trustee of the Variable Rate. The determination of the Variable Rate for a
Remarketing Period shall be conclusive and binding upon the Owners of the
Bonds, the Issuer, the Trustee and the Developer. The Trustee shall
immediately give written notice (which may include written notice by
electronic means) to the Owners of all of the Bonds of the Variable Rate
for the period between the next succeeding Remarketing Date and the second
succeeding Remarketing Date.
(2) No more than sixty (60) days, but at least forty-five (45) days,
prior to the Initial Remarketing Date, the Developer shall notify the
Owners (if no more than three), the Trustee and the Remarketing Agent of
the length of the proposed Remarketing Period commencing on the Initial
Remarketing Date, which shall extend for one (1) or more years. Subsequent
to the Initial Remarketing Date, the Developer will establish subsequent
Remarketing Dates as follows: no more than sixty (60) days, but at least
forty-five (45) days, prior to each Remarketing Date, the Developer will
notify the Owners of the Bonds, the Issuer, the Trustee and the
Remarketing Agent of the proposed subsequent Remarketing Date, which shall
be one (1) or more years from the next Remarketing Date. The Developer
shall also specify the interest payment dates if different than January 1
and July 1; provided that the interest payment dates specified may be no
more frequent than once each month.
(3) Notice of the Remarketing Date shall be given by the Trustee not
later than the twenty-fifth (25th) day preceding such Remarketing Date by
registered or certified mail to the Owners of all Outstanding Bonds and
such notice shall state that the Bonds are subject to mandatory tender on
the Remarketing Date, unless the Owner thereof waives such tender, shall
indicate the subsequent Remarketing Date, if any, and shall include a form
to indicate the election not to tender Bonds.
(4) Interest on the Bonds during the Variable Rate Period shall be
payable on each Interest Payment Date therefor and shall be calculated, to
the extent allowed by applicable law, on the basis of a year of 365 days
and the actual number of days elapsed.
Notwithstanding anything elsewhere contained in this Bond, (a) total Interest
paid on this Bond (including any Interest payable in accordance with Section
7.10 of the Indenture), cumulative from the original date of issuance of the
Bond, shall not exceed the sum of 13.25% per annum, simple and noncompounded for
each year (calculated on the basis of a 365-day year, actual number of days
elapsed) from such date of issuance to the date of calculation; and (b) if the
interest rate on this Bond shall at any time be deemed to be in excess of the
maximum rate allowed by law then the Bond shall instead bear interest at the
maximum rate permitted by such law. Any excess payment of such interest shall be
deemed to be a credit against the unpaid principal amount of this Bond.
Page 5 of 8
================================================================================
<PAGE>
================================================================================
UNITED STATES OF AMERICA
[LOGO] [EAGLE SEAL] [LOGO]
[ILLEGIBLE] $13,000,000
The foregoing interest provisions are a summary of those contained in the
Indenture, and reference is hereby made to the Indenture for a full statement of
their terms, which are incorporated herein by reference.
Limited Recourse. Pursuant to a Loan Agreement dated as of February 1,
1987, as amended by a First Amendment to Loan Documents dated as of September 8,
1999 (as amended, the "Loan Agreement"), and a Promissory Note dated as of
February 1, 1987, as amended and supplemented by an Allonge to Promissory Note
dated as of September 8, 1999 (as amended and supplemented, the "Note"), and a
Deed of Trust dated as of February 1, 1987, as amended by the First Amendment to
Loan Documents dated as of September 8, 1999 (as amended, the "Deed of Trust")
securing the Note, Newport Village I Limited Partnership and Newport Village II
Limited Partnership (formerly known as Newport Village Limited Partnership and
Dominion Newport Village II Limited Partnership, respectively), limited
partnerships duly organized and existing under the laws of the State of
Washington (collectively, the "Developer"), have 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 DEED OF TRUST AND THE ASSIGNMENT OF LEASES AND RENTS CONTAINED THEREIN,
ALL OF WHICH HAVE BEEN ASSIGNED TO THE TRUSTEE PURSUANT TO THE INDENTURE AND AN
ASSIGNMENT AGREEMENT FROM THE ISSUER DATED OF FEBRUARY 1, 1987, AND (II) ANY
ADDITIONAL SECURITY PROVIDED IN THE INDENTURE. THE OBLIGATIONS OF THE DEVELOPER
UNDER THE LOAN AGREEMENT, THE NOTE AND THE DEED OF TRUST ARE NON-RECOURSE TO THE
DEVELOPER, AND ARE ENFORCEABLE SOLELY AGAINST THE PROJECT, EXCEPT AS OTHERWISE
PROVIDED THEREIN. ANY PAYMENTS MADE ON THE MORTGAGE LOAN TO THE OWNER OF THIS
BOND SHALL BE FOR THE ACCOUNT OF THE ISSUER AND SHALL DISCHARGE THE ISSUER'S
OBLIGATIONS ON THIS BOND TO THE EXTENT OF SUCH PAYMENT, APPLYING ANY PAYMENT TO
INTEREST FIRST.
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
hereto.
Prior to the Conversion Date a Bond may only be transferred (i) to any
affiliate of the Partnership, to an affiliate with the same or substantially the
same general partners as the Partnership, to any entity arising out of any
merger or consolidation of the Partnership, by operation of law, or to a trustee
in bankruptcy of the Partnership; (ii) by an assignment to a bank or other
financial institution issuing a letter of credit or like instrument in
connection with the Mortgage Loan; or (iii) to one or more Institutional
Investors if, in each instance, the Issuer and the Trustee receive from the
transferee (A) its agreement to the transfer restrictions set forth in this
paragraph in connection with subsequent transfers of the Bond, and (B) evidence
of the assignment by the transferor to the transferee (or if there is to be
thereafter more than one Owner of the Bonds, evidence of the appointment and
acceptance of a Trustee and assignment of the Trustee) of the transferor's
rights in and to the Mortgage Loan and the other rights and interests as
theretofore conveyed to it by the Assignment, or an assignment of the Assignment
The Bonds are issuable as fully registered Bonds in Authorized
Denominations as provided in the Indenture.
Redemption of Bonds. The Bonds are subject to 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.
Remarketing in Lieu of Redemption of Bonds on Initial Remarketing Date.
Upon an election by the Owner of a redemption in whole of the Bonds pursuant to
Section 4.01(h) of the Indenture, at the direction of the Developer given not
less than sixty (60) days in advance, either (i) the Bonds shall be redeemed on
the date specified in the notice to the Issuer, the Trustee, and the Developer
from the Owners described in Section 4.01(h) of the Indenture or (ii) the Bonds
will be deemed tendered for purchase and remarketed as provided in Article V of
the Indenture on the date specified in the notice to the Issuer, the Trustee,
and the Developer from the Owner described in Section 4.01(h), or on such
earlier Interest Payment Date selected by the Developer in its direction to
remarket the Bonds but in no event before the first Interest Payment Date
following the Reference Month in 2011. The Bonds may only be remarketed if the
conditions specified in the Indenture are met which conditions include
requirements that either the Bonds be rated and that certain disclosures be made
in connection with such remarketing or that the remarketing be limited to
certain institutional investors who shall agree to restrictions on the transfer
thereof. The purchase price of Bonds so remarketed in lieu of redemption shall
be the principal amount thereof together with all accrued and unpaid Interest
(including all Base Interest, Contingent Interest and Deferred Interest then
payable) and shall be payable on the Initial Remarketing Date. If the conditions
to remarketing of the Bonds set forth in Article V of the Indenture are not
satisfied, or if the Bonds are not successfully remarketed, or if the full
purchase price thereof is not paid on the Initial Remarketing Date, or if all
Interest (including Contingent Interest and Deferred Interest then payable) and
principal payable on the Bonds up to and including the Initial Remarketing Date
has not been fully paid, then all Bonds tendered shall be redeemed and not
remarketed pursuant to Section 4.01(e) of the Indenture.
Page 6 of 8
================================================================================
<PAGE>
================================================================================
UNITED STATES OF AMERICA
[LOGO] [EAGLE SEAL] [LOGO]
[ILLEGIBLE] $13,000,000
Mandatory Tender of Bonds. The Bonds shall be subject to mandatory tender
to the Remarketing Agent on each Remarketing Date after the Initial Remarketing
Date for purchase by the Remarketing Agent, at a purchase price equal to the
principal amount thereof plus accrued Interest to the purchase date; provided,
however, that there need not be tendered on such Remarketing Date any Bonds with
respect to which the Remarketing Agent shall have received from the Owners
thereof a written notice at least five (5) Business Days prior to the applicable
Remarketing Date expressly electing not to tender their Bonds for purchase. Any
such election may not relate to a portion of any Bond held by the Owner, such
election may apply only to the entire principal amount of any Bond or Bonds.
Tendered Bonds. Any Bonds that are the subject of mandatory tender for
purchase but are not the subject of elections to retain the Bonds received by
the Remarketing Agent in a timely fashion shall be conclusively deemed tendered
for purchase on the Remarketing Date. If the Owner selects a redemption date for
redemption of the Bonds in accordance with Section 4.0 1(h) of the Indenture and
the Developer makes the remarketing election permitted by Section 4.04 of the
Indenture, all Bonds shall be conclusively deemed tendered for purchase on the
Initial Remarketing Date. All Bonds that are actually tendered for purchase
pursuant to the Indenture or are deemed tendered for purchase on a Remarketing
Date, including the Initial Remarketing Date, shall constitute tendered Bonds
for purposes of the Indenture; all tendered Bonds that are not actually
delivered for purchase on a Remarketing Date, including the Initial Remarketing
Date shall constitute "Undelivered Bonds" for purposes of the Indenture.
Undelivered Bonds that have been remarketed in accordance with the Indenture
shall be deemed to have been purchased if the purchase price therefor shall have
been deposited therefor and held by the Remarketing Agent; and the parties to
whom the Remarketing Agent shall have remarketed Undelivered Bonds so remarketed
shall be the owners of such Undelivered Bonds for all purposes under the
Indenture, including without limitation the right to transfer such Bonds.
Interest accruing from and after the Remarketing Date on such Undelivered Bonds
shall no longer be payable to the former Owners thereof but shall be paid to the
new registered owners thereof. Former Owners of Undelivered Bonds so remarketed
shall not be deemed to be Owners of Bonds under the Indenture, and such
Undelivered Bonds shall not be deemed Outstanding for purposes of the Indenture,
except for purposes of payment of the purchase price of such Undelivered Bonds
upon surrender thereof to the Remarketing Agent.
Enforcement. Only the Acting Party 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 (together with all unpaid Interest thereon) may be declared due and
payable by the Acting Party upon the conditions and in the manner and with the
effect 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.
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 certain
purposes, including 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.
By its acceptance of this Bond, the Owner hereof agrees that it will be
bound by and accepts the provisions of the Indenture and the Loan Documents (as
defined in the Loan Agreement). 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 Constitution or 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 altogether indebtedness of the Issuer,
is within every debt and other limit prescribed by said Constitution or
statutes.
Page 7 of 8
================================================================================
<PAGE>
================================================================================
UNITED STATES OF AMERICA
[LOGO] [EAGLE SEAL] [LOGO]
[ILLEGIBLE] $13,000,000
IN WITNESS WHEREOF, the Washington State Housing Finance Commission has
caused this Bond to be executed in its name with the signature of its Chairman
and attested by the signature of its Secretary, and its corporate seal to be
hereunto impressed, all as of the 8th day of September, 1999.
WASHINGTON STATE HOUSING
[SEAL] FINANCE COMMISSION
By /s/ Bosse Nutley
------------------------------
Chair
Attest:
/s/ Michael J. Murphy
- ----------------------------
Secretary
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the within mentioned Indenture
and is one of the Multifamily Housing Mortgage Revenue Bonds, Series 1987
(Newport Village Apartments Project) of the Washington State Housing Finance
Commission.
Date of Authentication: September 8, 1999
CHASE MANHATTAN TRUST COMPANY,
NATIONAL ASSOCIATION,
Trustee and Bond Registrar
By: /s/ Cheryl McDonald
--------------------------------
Cheryl McDonald
Authorized Signature
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ________________________________ the within Multifamily Housing Mortgage
Revenue Bond, Series 1987 (Newport Village Apartments Project), of the
Washington State Housing Finance Commission, and hereby authorizes the transfer
of this Bond on the registration books of the Trustee.
Dated: __________________________________
_________________________________________
Authorized Signature
_________________________________________
Name of Transferor
Signature Guaranteed by:
_________________________________________
_________________________________________
Name of Bank
By: _____________________________________
Title: __________________________________
Page 8 of 8
================================================================================
Exhibit 10 (aaaaah)
================================================================================
UNITED STATES OF AMERICA
[LOGO] [EAGLE SEAL] [LOGO]
[ILLEGIBLE] $5,650,000
STATE OF WASHINGTON
WASHINGTON STATE HOUSING FINANCE COMMISSION
MULTIFAMILY HOUSING MORTGAGE REVENUE BOND, SERIES 1986
(ORCHARD HILLS APARTMENTS PROJECT)
DATED DATE: DECEMBER 31, 1986
MATURITY DATE: AUGUST 31, 2029
REGISTERED OWNER: CHARTERMAC OWNER TRUST I
PRINCIPAL AMOUNT: FIVE MILLION SIX HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS
The Washington State Housing Finance Commission (the "Issuer"), a public
body corporate and politic and an instrumentality of the State of Washington
(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 Chase Manhattan Trust Company, National Association (the "Trustee") in
Seattle, Washington, as successor in trust to Seattle Trust and Savings Bank
(the "Original Trustee"), or its successor as Trustee, under the Indenture
(described below), the principal amount stated above, and to pay Interest on
said principal amount, from and including the dated date hereof until the
principal amount shall have been paid in accordance with the terms of this Bond,
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.
Payments made on the Mortgage Loan to the Owner of this Bond shall be for the
account of the Issuer, shall constitute payments on this Bond and shall
discharge the Issuer's obligations on this Bond to the extent of such payments,
applying any payments first to Interest payable on the due date of such payment
and thereafter to principal and premium, if any.
This Bond is one of a series of Bonds (the "Bonds") issued pursuant to the
Multifamily Housing Mortgage Revenue Bond (Orchard Hills Apartments Project)
Trust Indenture between the Original Trustee and the Issuer (the "Original
Indenture") dated as of December 1, 1986, as amended and supplemented by a First
Supplemental Indenture (the "Supplemental Indenture") dated as of September 8,
1999 (the "Amendment Date") between the Issuer and the Trustee (which Original
Indenture, as amended by the Supplemental Indenture and as from time to time
further amended and supplemented, is hereby referred to as the "Indenture"), and
Ch. 161, Laws of Washington 1983, 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 shall have the
respective meanings accorded such terms in the Indenture. The Bonds issued under
the Indenture are expressly limited to $5,650,000 principal amount at any time
Outstanding and are all of like tenor, except as to numbers and denominations,
and are issued for the purpose of providing construction and permanent financing
for qualified multifamily rental housing units in the State and of paying
certain expenses incidental thereto.
PAYMENT OF THE PRINCIPAL OF, INTEREST ON, AND REDEMPTION PREMIUM, IF ANY,
ON THE BONDS, SHALL BE A VALID CLAIM ONLY AS AGAINST THE SPECIAL FUND OR FUNDS
RELATING THERETO, IS NOT AN OBLIGATION OF THE STATE OR ANY MUNICIPAL
CORPORATION, SUBDIVISION OR AGENCY OF THE STATE OTHER THAN THE COMMISSION, AND
NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF WASHINGTON OR
ANY MUNICIPAL CORPORATION, SUBDIVISION OR AGENCY OF THE STATE, IS PLEDGED TO THE
PAYMENT OF THE PRINCIPAL OF, INTEREST ON AND REDEMPTION PREMIUM, IF ANY, ON THE
BONDS.
Interest on the Bonds.
(a) General. The Bonds shall bear interest as provided below.
(b) Base Interest. Until the Conversion Date, the Bonds shall bear base
interest calculated and payable as follows (which interest is referred to herein
as "Base Interest"):
(1) During the Initial Period, the Bonds shall bear Base Interest at
a rate equal to 10.0% per annum payable on each payment date specified in
paragraph (e)(1) below.
(2) During the Second Period, the Bonds shall bear Base Interest at
a rate equal to 9.0% per annum payable on each payment date specified in
paragraph (e)(1) below.
(3) During the Third Period, the Bonds shall bear Base Interest at a
rate equal to 8.0% per annum to (but not including) the Amendment Date,
and 7.25% per annum thereafter, payable on each payment date specified in
paragraph (c)(1) below.
Base Interest shall be calculated on the basis of a year of 365 days, actual
days elapsed.
Page 1 of 8
================================================================================
<PAGE>
================================================================================
UNITED STATES OF AMERICA
[LOGO] [EAGLE SEAL] [LOGO]
[ILLEGIBLE] [ILLEGIBLE]
(c) Contingent Interest, After the Initial Period and until the Conversion
Date, the Bonds also shall bear interest calculated and payable as follows:
(1) During each year or part thereof of the Third Period, to (but
not including) the Amendment Date, the Bonds bore Contingent Interest (as
defined in the Original Indenture) at an annual rate equal to the Primary
Contingent Interest Rate (as defined in the Original Indenture) payable on
the basis and to the extent of 100% of Net Cash Flow for each such year,
or part thereof, or, to the extent not fully paid on or before the
Amendment Date because 100% of Net Cash Flow was insufficient, on the
basis and to the extent of 100% of Net Sale or Refinancing Proceeds.
Contingent Interest equal to Maximum Primary Contingent Interest (as
defined in the Original Indenture) was payable on the Bonds on each
payment date specified in paragraph (e)(2) below on the basis and to the
extent of 100% of Net Cash Flow, measured for purposes of such payment and
subject to the adjustments and reconciliation as specified in paragraph
(1) below. If 100% of Net Cash Flow was insufficient to pay the Maximum
Primary Contingent Interest on such dates, then there was payable the
maximum amount possible to the extent of 100% of Net Cash Flow (which
amount was referred to as the "Primary Contingent Interest").
The difference between the Maximum Primary Contingent Interest and the
Primary Contingent Interest was deferred with interest thereon at 9.0% per
annum, compounded annually, with respect to all such interest accrued and
unpaid to (but not including) the Amendment Date (such difference together
with the compounded interest thereon was referred to collectively with all
such amounts previously deferred and unpaid as "Primary Deferred
Interest").
All Primary Deferred Interest (in the agreed approximate amount of
$635,721) which remains accrued and unpaid as of the Amendment Date is
hereby forgiven, abrogated and discharged. From and after the Amendment
Date, no further Maximum Primary Contingent Interest shall accrue or be
due or payable.
(2) During each year or part thereof, after the Initial Period and
to (but not including) the Amendment Date, the Bonds bore Contingent
Interest at an annual rate equal to the Supplemental Contingent Interest
Rate payable on the basis and to the extent of 25% of so much of Net Cash
Flow for each such year, or part thereof, as remained after reducing Net
Cash Flow by the amount of any payments on the basis of Net Cash Flow
specified above in paragraph (c)(l). As of the Amendment Date, no
Supplemental Contingent Interest (as defined below) has been paid, and all
such interest remains accrued and unpaid.
From and after the Amendment Dare, and to the Conversion Date,
Contingent Interest equal to Maximum Supplemental Contingent Interest
shall continue to be payable on the Bonds on each payment date specified
in paragraph (e)(2) below on the basis and to the extent of 25% of Net
Cash Flow, measured for purposes of such payment and subject to the
adjustments and reconciliation as specified in paragraph (f) below. If 25%
of Net Cash Flow is insufficient to pay the Maximum Supplemental
Contingent Interest payable on any payment date specified in paragraph
(e)(2) below, then there shall be payable the maximum amount possible on
the basis and to the extent of 25% of Net Cash Flow (which amount is
referred to as the "Supplemental Contingent Interest").
The difference between the Maximum Supplemental Contingent Interest
and the Supplemental Contingent Interest shall be deferred without
interest (such difference is referred to collectively with all such
amounts previously deferred and unpaid, including amounts deferred and
unpaid prior to the Amendment Date, as the "Supplemental Deferred
Interest") and shall thereafter be payable on the earliest possible
payment dates specified in paragraph (e)(2) below on the basis and to the
extent of 25% of Net Cash Flow, measured for purposes of such payment and
subject to the adjustments and reconciliation as specified in paragraph
(f) below. Supplemental Deferred Interest shall be paid on the basis and
to the extent of 25% of Net Cash Flow before any Supplemental Contingent
Interest is paid on such basis.
To the extent that Maximum Supplemental Contingent Interest and all
Supplemental Deferred Interest are not fully paid on the basis and to the
extent of 25% of Net Cash Flow on payment dates specified in paragraph
(e)(2) below, they shall be payable on the basis and to the extent of 25%
of Net Sale or Refinancing Proceeds on the earliest possible payment dates
specified in paragraph (e)(3) below.
(d) Reserved.
(e) Payment Dates for Interest. The Interest payable on the Bonds as
provided above shall be payable on the following dates:
(1) Base Interest shall be payable (i) on each Interest Payment Date
for Base Interest, (ii) on each redemption date before the Conversion Date
(but only with respect to the Bonds redeemed), and (iii) on the Conversion
Date.
(2) Contingent Interest and Deferred Interest that is payable on the
basis of Net Cash Flow shall he payable (i) on each Interest Payment Pate
for Contingent Interest and Deferred Interest to and
Page 2 of 8
================================================================================
<PAGE>
================================================================================
UNITED STATES OF AMERICA
[LOGO] [EAGLE SEAL] [LOGO]
[ILLEGIBLE] [ILLEGIBLE]
including the Conversion Date, (ii) on each redemption date during the
Second Period and the Third Period (but only with respect to the Bonds
redeemed), (iii) on each date on which Contingent Interest and Deferred
Interest is payable from Net Sale or Refinancing Proceeds (as provided in
paragraph (e)(3) below), and (iv) on the Conversion Dame.
(3) Contingent Interest and Deferred Interest that is payable on the
basis of Net Sale or Refinancing Proceeds shall be payable on the next
Interest Payment Date for any interest succeeding by at least thirty (30)
days the date of the Event of Sale or Refinancing relating to the Sale of
the Project or Refinancing of the Project, except in the case of (x) a
Refinancing of the Project described in clause (i) or (iv) of the
definition thereof, in which case it shall be payable on the redemption
date or payment date, as the case may be, (y) a Sale of the Project
described in clause (i) of the definition thereof resulting in a call of
the Bonds for redemption pursuant to Section 4.01(f) of the Indenture, in
which case it shall be payable on the redemption date, or (z) a
Refinancing of the Project described in clause (ii) of the definition
thereof, in which case it shall be payable on the Initial Remarketing
Date.
(f) Calculation of Net Cash Flow.
(1) (i) No later than thirty (30) days before each payment date for
Contingent Interest and Deferred Interest specified in paragraph (e) (2)
above (or such lesser number of days as shall be the maximum number of
days possible if the payment date was not known until less than forty (40)
days before the payment date), the Developer shall calculate Net Cash Flow
for the three-month period ending on the last day of the third preceding
month before such payment date and shall provide the Trustee (but only
after the Trustee has accepted the duty to calculate interest pursuant to
the Indenture) and the Owners (if fewer than three) (i) the analysis of
such Net Cash Flow, (ii) unaudited financial statements of the Project for
such three-month period and (iii) a calculation of the amount of
Contingent Interest and Deferred Interest then payable.
(ii) Notwithstanding the foregoing in clause (i), (A) except
as may result from adjustments and reconciliation provided below in this
paragraph (f), the period of time for which Net Cash Flow is measured for
purposes of a payment date for Contingent Interest and Deferred Interest
on any Bonds specified in paragraph (e)(2) hereof shall not include any
time for which Net Cash Flow has been measured for purposes of a previous
payment date for Contingent Interest and Deferred Interest on such Bonds
specified in paragraph (e)(2) hereof, and (B) the calculation of Net Cash
Flow and the amount of Contingent Interest and Deferred Interest payable
therefrom on the Conversion Date shall be reconciled and adjusted to give
effect to the actual amount of Net Cash Flow for the current calendar year
(and the preceding calendar year if the Conversion Date falls before
delivery of the audit referred to in paragraph (f)(2) hereof in the
current calendar year) up to but not including the Conversion Date (such
actual amount of Net Cash Flow being measured by the actual amount known
as of the most recent possible date and an amount reasonably estimated to
be earned between such date and the Conversion Date) and all Contingent
Interest and Deferred Interest paid during the current calendar year (and
the preceding calendar year if the Conversion Date falls before delivery
of the audit referred to in paragraph (f)(2) hereof in the current
calendar year) in the manner described in paragraph (f)(3) below, except
that any underpayments or overpayments of Contingent Interest and Deferred
Interest shall be paid or refunded, as the case may be, on the Conversion
Date.
(iii) The amount of Net Cash Flow reflected in the analysis
described above, as adjusted in the case of the analysis in connection
with the Conversion Dare, shall provide the basis for the calculation of
Contingent Interest and Deferred Interest payable on the basis of Net Cash
Flow on each payment date therefor specified in paragraph (e)(2) hereof,
except as provided below. The Trustee, upon direction of the owners of a
majority in principal amount of the Bonds (if it has accepted the duty to
calculate interest thereon pursuant to the Indenture), or the Owners of a
majority in principal amount of Bonds themselves, may request further
substantiation of the Developer's calculation of Net Cash Flow and may
verify and correct as necessary the calculations thereof. If the Trustee
or the Owners of a majority in principal amount of the Bonds do so
reasonably modify such calculation, the Trustee or such Owners shall
notify the Developer of such modified calculation no later than ten (10)
Business Days before such payment date (or such lesser number of days as
shall be the maximum number of days practicable if the Trustee or such
Owners received the calculation of Net Cash Flow less than thirty (30)
days before the payment date) and such modified calculation shall be the
basis for the calculation of Contingent Interest and Deferred Interest
payable on the basis of Net Cash Flow on the payment date. Except to the
extent provided in this paragraph (f)(1) with respect to the Conversion
Date, the analysis and payment on the basis of Net Cash Flow described in
this paragraph (f)(1) is intended to provide a preliminary payment of
Contingent Interest and Deferred Interest on the basis of Net Cash Flow
prior and subject to the adjustment and reconciliation process described
in paragraphs (f)(2) and (f)(3) hereof.
(2) No later than March 15 of each calendar year (up to and, unless
the Conversion Date falls before delivery of the audit, including the
calendar year in which the Conversion Date occurs) the Developer shall
provide to the Issuer, the Trustee and the Owners of the Bonds (if fewer
than three) an audit of the operations of the Project for the preceding
calendar year prepared and certified by an Accountant acceptable to the
Trustee (if it has accepted the duty to calculate interest pursuant to the
Indenture) and the Owners (if fewer than three) in accordance with
generally accepted auditing standards. The audit shall state the actual
amount of
Page 3 of 8
================================================================================
<PAGE>
================================================================================
UNITED STATES OF AMERICA
[LOGO] [EAGLE SEAL] [LOGO]
[ILLEGIBLE] [ILLEGIBLE]
Net Cash Flow for that calendar year and shall calculate all Contingent
Interest and Deferred Interest paid and payable from Net Cash Flow during
such calendar year pursuant hereto.
(3) The audit prepared as described in paragraph (f)(2) shall state
the amount of Contingent Interest and Deferred Interest payable and paid
during the subject calendar year. If the amounts of Contingent Interest
and Deferred Interest payable on the basis of Net Cash Flow (measured on
the basis of actual Net Cash Flow for such calendar year according to the
audit) exceeded the amount paid, then there shall be payable to the Owners
of the Bonds any such payable and unpaid amounts on the payment date for
Contingent Interest and Deferred Interest specified in paragraph (e)(2)
hereof immediately following the receipt by the Trustee and the said
Owners of the audit. If the amount of Contingent Interest and Deferred
Interest payable on the basis of Net Cash Flow (measured on the basis of
actual Net Cash Flow for such calendar year according to the audit) is
less than the amount actually paid, such overpaid amount shall be credited
against any other interest payments (whether Base Interest or Contingent
Interest and Deferred Interest) or other payments due from the Issuer to
the Owners of the Bonds on the Bond Payment Date (or Bond Payment Dates)
immediately following the receipt by the Trustee and the said Owners of
the audit and the Owners shall not be required to refund any such amount
unless the crediting does not exhaust the overpayment, in which case the
balance of the overpayment will be refunded by the Owners on the
Conversion Date.
(g) Fair Market Value of the Project for Purposes of Determining
Refinancing Proceeds.
(1) In order to calculate the fair market value of the Project for
purposes of determining Sale or Refinancing Proceeds in the event of a
Refinancing of the Project (other than a Refinancing of the Project
described in clause (iii) of the definition thereof) the fair market value
of the Project is required to be determined as set forth below, such
determination to be completed no later than fifteen (15) days before the
date on which Contingent Interest and Deferred Interest are payable on the
basis and to the extent of Net Sale or Refinancing Proceeds or as soon
thereafter as possible (but not after the said payment date if the notice
described in the following sentence cannot be given at the time
specified). The Developer shall give notice to the Trustee and to the
Owners of the Bonds of the impending Refinancing of the Project at least
ninety (90) days before the expected date of Refinancing of the Project or
as much notice as is possible, promptly upon learning of the impending
Refinancing of the Project. The Owners of all of the Bonds and the
Developer may jointly determine and agree upon the fair market value of
the Project but must do so at least sixty (60) days before the proposed
date of the Refinancing of the Project; failing such agreement the Owners
of a majority in principal amount of the Bonds shall select an independent
M.A.I. appraiser and the Developer shall select an independent M.A.I.
appraiser. The appraisers shall jointly determine and agree upon the fair
market value of the Project. If the two appraisers are unable to agree
upon the fair market value of the Project at least thirty (30) days before
the proposed date of the Refinancing of the Project, the Owners and the
Developer shall select a third independent M.A.I. appraiser. If such
Owners and the Developer are unable to agree upon a third appraiser by
such date, the two appraisers shall select the third appraiser. If the two
appraisers are unable to agree upon the third appraiser at least
twenty-five (25) days before the proposed date of the Refinancing of the
Project, such Owners or Developer may petition any court of competent
jurisdiction for the appointment of the third independent appraiser. As
early as practicable, but prior to the expected date of the Refinancing of
the Project, the third appraiser shall select from between the two
appraisals the one which the third appraiser believes to assess more
accurately the fair market value of the Project and the appraisal so
selected shall be the fair market value of the Project, shall provide the
basis for the calculation of Contingent Interest and Deferred Interest
payable on the basis of Net Sale or Refinancing Proceeds in the event of a
Refinancing of the Project (other than a Refinancing of the Project
described in clause (iii) of the definition thereof) on each payment date
therefor specified in paragraph (e)(3) hereof and shall be binding upon
the Developer and the Owners of the Bonds. The fees and expenses of the
appraiser selected by each party shall be borne by the party selecting the
appraiser and the cost of the third appraiser shall be borne equally by
the Developer and the Owners of the Bonds.
(2) The fair market value of the Project for purposes of this
paragraph (g) shall reflect the amount each appraiser believes an informed
and willing purchaser under no compulsion to purchase the Project would
pay to an informed and willing seller under no compulsion to sell the
Project, less those costs of a sale appropriate to the marketplace within
which the Project would be sold. Such determination shall take into
consideration such factors as the appraisers may deem relevant. Except as
provided below, the fair market value of the Project set forth in an
appraisal shall be determined as of the date of such appraisal.
(3) If the Refinancing of the Project is based upon a redemption of
Bonds pursuant to Section 4.01(d) of the Indenture, the fair market value
of the Project shall be determined as of the day before the occurrence of
any events requiring the payment of Insurance Proceeds or a Condemnation
Award, as if such events had not occurred and were not anticipated.
(h) Interest During a Variable Rate Period. From and after the Initial
Remarketing Date, if all of the Bonds then Outstanding have been remarketed as
provided in the Indenture and in accordance herewith, the Bonds shall bear
interest at a rate determined as follows:
Page 4 of 8
================================================================================
<PAGE>
================================================================================
UNITED STATES OF AMERICA
[LOGO] [EAGLE SEAL] [LOGO]
[ILLEGIBLE] [ILLEGIBLE]
(1) On a Business Day not prior to ten (10) Business Days prior to
the Initial Remarketing Date and each subsequent Remarketing Date, the
Remarketing Agent, having due regard to prevailing market conditions,
shall determine the interest rate (the "Variable Rate") which, if borne by
the Remarketed Bonds on such date, would be the interest rate, but would
not exceed the interest rate, which would result in the market value of
the Remarketed Bonds on such day (as if such day were the first day of
such Remarketing Period) being 100% of the principal amount thereof
(together with interest if any, accrued thereon; provided, however, that
in no event shall the Variable Rate exceed 14.5% per annum or the maximum
lawful rate, whichever is less. If for any reason the Variable Rate so
determined by the Remarketing Agent shall be held to be invalid or
unenforceable by a court of competent jurisdiction, the Remarketing Agent
shall determine the interest rate for such Remarketing Period, which shall
be a percentage of the 30 Revenue Bond Index (as published in The Bond
Buyer; or if such Index is not available, an index comparable to such
Index, in the judgment of the Remarketing Agent) for the most recent
period for which information is available, computed in accordance with the
following table:
If the length of the But the length of the The applicable percentage
Remarketing Period (in Remarketing Period (in of the 30 Revenue Bond
years) is at least: years) is less than: Index is:
- --------------------------------------------------------------------------------
5 or greater (NA.) 85%
1 5 80
The Remarketing Agent shall promptly, upon the determination of the
Variable Rate, notify the Issuer, the Developer, the Owners and the
Trustee of the Variable Rate. The determination of the Variable Rate for a
Remarketing Period shall be conclusive and binding upon the Owners of the
Bonds, the Issuer, the Trustee and the Developer. The Trustee shall
immediately give written notice (which may include written notice by
electronic means) to the Owners of all of the Bonds of the Variable Rate
for the period between the next succeeding Remarketing Date and the second
succeeding Remarketing Date.
(2) No more than sixty (60) days, but at least forty-five (45) days,
prior to the Initial Remarketing Date, the Developer shall notify the
Owners (if no more than three), the Trustee and the Remarketing Agent of
the length of the proposed Remarketing Period commencing on the Initial
Remarketing Date, which shall extend for one (1) or more years. Subsequent
to the Initial Remarketing Date, the Developer will establish subsequent
Remarketing Dates as follows: no more than sixty (60) days, but at least
forty-five (45) days, prior to each Remarketing Date, the Developer will
notify the Owners of the Bonds, the Issuer, the Trustee and the
Remarketing Agent of the proposed subsequent Remarketing Date, which shall
be one (1) or more years from the next Remarketing Date. The Developer
shall also specify the interest payment dates if different than January 1
and July 1; provided that the interest payment dates specified may be no
more frequent than once each month.
(3) Notice of the Remarketing Date shall be given by the Trustee not
later than the twenty-fifth (25th) day preceding such Remarketing Date by
registered or certified mail to the Owners of all Outstanding Bonds and
such notice shall state that the Bonds are subject to mandatory tender on
the Remarketing Date, unless the Owner thereof waives such tender, shall
indicate the subsequent Remarketing Date, if any, and shall include a form
to indicate the election not to tender Bonds.
(4) Interest on the Bonds during the Variable Rate Period shall be
payable on each Interest Payment Date therefor and shall be calculated, to
the extent allowed by applicable law, on the basis of a year of 365 days
and the actual number of days elapsed.
Notwithstanding anything elsewhere contained in this Bond, (a) total Interest
paid on this Bond (including any Interest payable in accordance with Section
7.10 of the Indenture), cumulative from the original date of issuance of the
Bond, shall not exceed the sum of 13.25% per annum, simple and noncompounded for
each year (calculated on the basis of a 365-day year, actual number of days
elapsed) from such date of issuance to the date of calculation; and (b) if the
interest rate on this Bond shall at any time be deemed to be in excess of the
maximum rate allowed by law then the Bond shall instead bear interest at the
maximum rate permitted by such law. Any excess payment of such interest shall be
deemed to be a credit against the unpaid principal amount of this Bond.
The foregoing interest provisions are a summary of those contained in the
Indenture, and reference is hereby made to the Indenture for a full statement of
their terms, which are incorporated herein by reference.
Limited Recourse. Pursuant to a Loan Agreement dated as of December 1,
1986, as amended by a First Amendment to Loan Documents dated as of September 8,
1999 (as amended, the "Loan Agreement"), and a Promissory Note dated as of
December 1, 1986, as amended and supplemented by an Allonge to Promissory Note
dated as of September 8, 1999 (as amended and supplemented, the "Note"), and a
Deed of Trust dated as of December 1, 1986, as amended by the First Amendment to
Loan Documents dated as of September 8, 1999 (as amended, the "Deed of Trust")
securing the Note, Orchard Hills Associates, a Washington General Partnership
("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
Page 5 of 8
================================================================================
<PAGE>
================================================================================
UNITED STATES OF AMERICA
[LOGO] [EAGLE SEAL] [LOGO]
[ILLEGIBLE] [ILLEGIBLE]
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 DEED OF TRUST AND THE
ASSIGNMENT OF LEASES AND RENTS CONTAINED THEREIN, ALL OF WHICH HAVE BEEN
ASSIGNED TO THE TRUSTEE PURSUANT TO THE INDENTURE AND AN ASSIGNMENT AGREEMENT
FROM THE ISSUER DATED OF DECEMBER 1,1986, AND (II) ANY ADDITIONAL SECURITY
PROVIDED IN THE INDENTURE. THE OBLIGATIONS OF THE DEVELOPER UNDER THE LOAN
AGREEMENT, THE NOTE AND THE DEED OF TRUST ARE NON-RECOURSE TO THE DEVELOPER, AND
ARE ENFORCEABLE SOLELY AGAINST THE PROJECT, EXCEPT AS OTHERWISE PROVIDED
THEREIN. ANY PAYMENTS MADE ON THE MORTGAGE LOAN TO THE OWNER OF THIS BOND SHALL
BE FOR THE ACCOUNT OF THE ISSUER AND SHALL DISCHARGE THE ISSUER'S OBLIGATIONS ON
THIS BOND TO THE EXTENT OF SUCH PAYMENT, APPLYING ANY PAYMENT TO INTEREST FIRST.
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
hereto.
Prior to the Conversion Date a Bond may only be transferred (i) to any
affiliate of the Partnership, to an affiliate with the same or substantially the
same general partners as the Partnership, to any entity arising out of any
merger or consolidation of the Partnership, by operation of law, or to a trustee
in bankruptcy of the Partnership; (ii) by an assignment to a bank or other
financial institution issuing a letter of credit or like instrument in
connection with the Mortgage Loan; or (iii) to one or more Institutional
Investors if, in each instance, the Issuer and the Trustee receive from the
transferee (A) its agreement to the transfer restrictions set forth in this
paragraph in connection with subsequent transfers of the Bond, and (B) evidence
of the assignment by the transferor to the transferee (or if there is to be
thereafter more than one Owner of the Bonds, evidence of the appointment and
acceptance of a Trustee and assignment of the Trustee) of the transferor's
rights in and to the Mortgage Loan and the other rights and interests as
theretofore conveyed to it by the Assignment, or an assignment of the
Assignment.
The Bonds are issuable as fully registered Bonds in Authorized
Denominations as provided in the Indenture.
Redemption of Bonds. The Bonds are subject to 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.
Remarketing in Lieu of Redemption of Bonds on Initial Remarketing Date.
Upon an election by the Owner of a redemption in whole of the Bonds pursuant to
Section 4.01(h) of the Indenture, at the direction of the Developer given not
less than sixty (60) days in advance, either (i) the Bonds shall be redeemed on
the date specified in the notice to the Issuer, the Trustee, and the Developer
from the Owners described in Section 4.01(h) of the Indenture or (ii) the Bonds
will be deemed tendered for purchase and remarketed as provided in Article V of
the Indenture on the date specified in the notice to the Issuer, the Trustee,
and the Developer from the Owner described in Section 4.01(h), or on such
earlier Interest Payment Date selected by the Developer in its direction to
remarket the Bonds but in no event before the first Interest Payment Date
following the Reference Month in 2011. The Bonds may only be remarketed if the
conditions specified in the Indenture are met which conditions include
requirements that either the Bonds be rated and that certain disclosures be made
in connection with such remarketing or that the remarketing be limited to
certain institutional investors who shall agree to restrictions on the transfer
thereof. The purchase price of Bonds so remarketed in lieu of redemption shall
be the principal amount thereof together with all accrued and unpaid Interest
(including all Base Interest, Contingent Interest and Deferred Interest then
payable) and shall be payable on the Initial Remarketing Date. If the conditions
to remarketing of the Bonds set forth in Article V of the Indenture are not
satisfied, or if the Bonds are not successfully remarketed, or if the full
purchase price thereof is not paid on the Initial Remarketing Date, or if all
Interest (including Contingent Interest and Deferred Interest then payable) and
principal payable on the Bonds up to and including the Initial Remarketing Date
has not been fully paid, then all Bonds tendered shall be redeemed and not
remarketed pursuant to Section 4.01(e) of the Indenture.
Mandatory Tender of Bonds. The Bonds shall be subject to mandatory tender
to the Remarketing Agent on each Remarketing Date after the Initial Remarketing
Date for purchase by the Remarketing Agent, at a purchase price equal to the
principal amount thereof plus accrued Interest to the purchase date; provided,
however, that there need not be tendered on such Remarketing Date any Bonds with
respect to which the Remarketing Agent shall have received from the Owners
thereof a written notice at least five (5) Business Days prior to the applicable
Remarketing Date expressly electing not to tender their Bonds for purchase. Any
such election may not relate to a portion of any Bond held by the Owner, such
election may apply only to the entire principal amount of any Bond or Bonds.
Tendered Bonds. Any Bonds that are the subject of mandatory tender for
purchase but are not the subject of elections to retain the Bonds received by
the Remarketing Agent in a timely fashion shall be conclusively deemed tendered
for purchase on the Remarketing Date. If time Owner selects a redemption date
for redemption of the Bonds in accordance with Section 4.01(h) of the Indenture
and the Developer makes the remarketing election permitted by Section
Page 6 of 8
================================================================================
<PAGE>
================================================================================
UNITED STATES OF AMERICA
[LOGO] [EAGLE SEAL] [LOGO]
[ILLEGIBLE] [ILLEGIBLE]
4.04 of the Indenture, all Bonds shall be conclusively deemed rendered for
purchase on the Initial Remarketing Date. All Bonds that are actually tendered
for purchase pursuant to the Indenture or are deemed tendered for purchase on a
Remarketing Date, including the Initial Remarketing Date, shall constitute
tendered Bonds for purposes of the Indenture; all tendered Bonds that are not
actually delivered for purchase on a Remarketing Date, including the Initial
Remarketing Date shall constitute "Undelivered Bonds" for purposes of the
Indenture. Undelivered Bonds that have been remarketed in accordance with the
Indenture shall be deemed to have been purchased if the purchase price therefor
shall have been deposited therefor and held by the Remarketing Agent; and the
parties to whom the Remarketing Agent shall have remarketed Undelivered Bonds so
remarketed shall be the owners of such Undelivered Bonds for all purposes under
the Indenture, including without limitation the right to transfer such Bonds.
Interest accruing from and after the Remarketing Date on such Undelivered Bonds
shall no longer be payable to the former Owners thereof but shall be paid to the
new registered owners thereof. Former Owners of Undelivered Bonds so remarketed
shall not be deemed to be Owners of Bonds under the Indenture, and such
Undelivered Bonds shall not be deemed Outstanding for purposes of the Indenture,
except for purposes of payment of the purchase price of such Undelivered Bonds
upon surrender thereof to the Remarketing Agent.
Enforcement. Only the Acting Party 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 (together with all unpaid Interest thereon) may be declared due and
payable by the Acting Party upon the conditions and in the manner and with the
effect 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.
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 certain
purposes, including 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.
By its acceptance of this Bond, the Owner hereof agrees that it will be
bound by and accepts the provisions of the Indenture and the Loan Documents (as
defined in the Loan Agreement). 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 Constitution or 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 Constitution or
statutes.
IN WITNESS WHEREOF, the Washington State Housing Finance Commission has
caused this Bond to be executed in its name with the signature of its Chairman
and attested by the signature of its Secretary, and its corporate seal to be
hereunto impressed, all as of the 8th day of September, 1999.
WASHINGTON STATE HOUSING
[SEAL] FINANCE COMMISSION
By /s/ Bosse Nutley
------------------------------
Ms. Bosse Nutley
Chair
Attest:
/s/ Michael J. Murphy
- ----------------------------
Michael J. Murphy
Secretary
Page 7 of 8
================================================================================
<PAGE>
================================================================================
UNITED STATES OF AMERICA
[LOGO] [EAGLE SEAL] [LOGO]
[ILLEGIBLE] [ILLEGIBLE]
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the within mentioned Indenture
and is one of the Multifamily Housing Mortgage Revenue Bonds, Series 1986
(Orchard Hills Apartments Project) of the Washington State Housing Finance
Commission.
Date of Authentication: September 8, 1999
CHASE MANHATTAN TRUST COMPANY,
NATIONAL ASSOCIATION,
Trustee and Bond Registrar
By: /s/ Cheryl McDonald
--------------------------------
Cheryl McDonald
Authorized Signatory
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _______________________________ the within Multifamily Housing Mortgage
Revenue Bond, Series 1986 (Orchard Hills Apartments Project), of the Washington
State Housing Finance Commission, and hereby authorizes the transfer of this
Bond on the registration books of the Trustee.
Dated ___________________________________
_________________________________________
Authorized Signature
_________________________________________
Name of Transferor
Signature Guaranteed by:
_________________________________________
_________________________________________
Name of Bank
By: _____________________________________
Title: __________________________________
Page 8 of 8
================================================================================
Exhibit 10 (aaaaai)
Number: R-1 $9,520,000
California Statewide Communities Development Authority
Multifamily Housing Revenue Bond
(Standiford Garden Apartments Project) Series 1999SS
Dated Date: Maturity Date: Interest Rate:
----------- -------------- --------------
September 20, 1999 August 1,2036 7.125%
Registered Owner: CHARTER MAC EQUITY ISSUER TRUST
Principal Amount: NINE MILLION FIVE HUNDRED TWENTY 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, 1999,
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 $9,520,000 in aggregate principal
amount at any time Outstanding (except for additional bonds that may be issued
pursuant to the Indenture) 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.
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
<PAGE>
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.
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
UNDER THE INDENTURE. 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. 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.
Interest on the Bonds. The Bonds (including this Bond) shall bear
interest on the outstanding principal amount thereof at a rate of seven and
125/1000 percent (7.125%) 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, 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, 1999, and on each Bond Payment Date.
Limited Recourse. Pursuant to a Loan Agreement dated as of August 1,
1999, and a Promissory Note (the "Note") dated the date of issuance of the
Bonds, Modesto Standiford Limited, L.P., 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 AUGUST 1, 1999 AND THE OTHER LOAN DOCUMENTS, 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
2
<PAGE>
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 Trustee or the Majority Owner, as appropriate,
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/ D.B. HARRISON
----------------------------
Vice Chairman
ATTEST:
NORMA LAMAS
- ----------------------
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/ LETICIA SABINIANO
----------------------------
Authorized Signatory
Date of Authentication: Sept. 20, 1999
-------------------
4
Exhibit 10 (aaaaaj)
UNITED STATES OF AMERICA
STATE OF FLORIDA
Housing Finance Authority of Miami-Dade County (Florida)
Multifamily Mortgage Revenue Bond
1999 Series B
(Douglas Pointe Apartments Project)
Number: R- 1
Dated Date: September 28, 1999
Maturity Date: September 1, 2041
Registered Owner: CHARTER MAC EQUITY ISSUER TRUST
Principal Amount: $7,100,000
Interest Rate: 7.00% per annum
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, 1999 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 $7,100,000 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.
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
1
<PAGE>
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 28, 1999, to the date
of maturity or redemption or acceleration prior to maturity at a rate of seven
percent (7.00%)] per annum comprised of twelve 30-day months. The interest
payable on the Bonds as provided above shall be payable on the first day of each
month, commencing November 1, 1999 and on each Bond Payment Date.
Limited Recourse. Pursuant to a Loan Agreement dated as of September 1,
1999, and a Promissory Note (the "Note") dated the date of issuance of the
Bonds, Douglas Pointe 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, 1999, AND THE ASSIGNMENT OF LEASES, RENTS AND OTHER INCOME FROM THE
DEVELOPER TO THE TRUSTEE, DATED AS OF SEPTEMBER 1, 1999, 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
2
<PAGE>
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, EXCEPT THAT NO INVESTMENT LETTER SHALL BE REQUIRED FOR A TRANSFER OF
BONDS TO THE BANK PURSUANT TO SECTION 3.10 OF 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.
HOUSING FINANCE AUTHORITY OF MIAMI-
DADE COUNTY (FLORIDA)
(SEAL) HOUSING FINANCE AUTHORITY
MIAMI-DADE By: /s/ Milton J. Wallace
COUNTY -------------------------------------
FLORIDA Milton J. Wallace
1978 Chairman
Attest:
/s/ Cordella Ingram
- -------------------------------
Assistant Secretarty
CORDELLA INGRAM
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 1999 Series B
(Douglas Pointe Apartments Project) of the Housing Finance Authority of
Miami-Dade County (Florida).
THE BANK OF NEW YORK,
as Trustee and Authenticating Agent
By: /s/ Patrick T. Teague
-------------------------------------
Date of Authentication: Authorized
Signatory
PATRICK T. TEAGUE
9/18/99
- ------------------------
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
Exhibit 10 (aaaaak)
THE TRANSFER OF THIS BOND IS SUBJECT TO CERTAIN
RESTRICTIONS AS SET FORTH IN THE INDENTURE
UNITED STATES OF AMERICA
STATE OF ARKANSAS
Arkansas Development Finance Authority
Multifamily Housing Revenue Bonds
(Chapel Ridge of Texarkana Project)
Series 1999G
Number: R- 1
Dated Date: September 29, 1999
Maturity Date: September 1, 2041
Registered Owner: Charter Mac Equity Issuer Trust
Principal Amount: $5,800,000
Interest Rate: 7.375%
The Arkansas Development Finance Authority (the "Issuer"), a public body
corporate and politic of the State of Arkansas (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 Bank of Oklahoma, N.A. in
Oklahoma City, Oklahoma, 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, 1999 between the Issuer
and the Trustee (as amended and supplemented from time to time, the
"Indenture"), and the Arkansas Development Finance Authority Act, as amended,
Arkansas Code Annotated Sections 15-5-101 et seq. (Repl. 1994; Supp. 1997) (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 $5,800.000 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. Pursuant to a Loan Agreement
dated as of September 1,
<PAGE>
1999, and a Promissory Note (the "Note") dated the date of issuance of the
Bonds. Texarkana Housing Associates, an Arkansas 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 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. 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 MORTGAGE AND
SECURITY AGREEMENT FROM THE DEVELOPER FOR THE BENEFIT OF THE TRUSTEE, DATED AS
OF SEPTEMBER 1, 1999, AND THE ASSIGNMENT OF LEASES, RENTS AND OTHER INCOME FROM
THE DEVELOPER TO THE TRUSTEE, DATED AS OF SEPTEMBER 1, 1999, ALL OF WHICH HAVE
BEEN ASSIGNED TO THE TRUSTEE PURSUANT TO THE INDENTURE, AND (II) ANY ADDITIONAL
SECURITY PROVIDED IN THE INDENTURE. Neither the State of Arkansas 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 Arkansas 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 Arkansas 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.
THE BONDS ARE LIMITED OBLIGATIONS OF THE ISSUER, PAYABLE SOLELY FROM
REVENUES AND RECEIPTS SPECIFICALLY PLEDGED THEREFOR. IN NO EVENT SHALL THE BONDS
CONSTITUTE AN INDEBTEDNESS FOR WHICH THE FAITH AND CREDIT, OR ANY OF THE
REVENUES, OF THE STATE OF ARKANSAS OR ANY POLITICAL SUBDIVISION THEREOF, WITHIN
THE MEANING OF ANY PROVISION OF THE CONSTITUTION OF LAW'S OF THE STATE OF
ARKANSAS, ARE PLEDGED. THE ISSUER HAS NO TAXING POWER.
Interest on the Bonds
The Bonds (including this Bond) shall bear interest on the outstanding
principal amount thereof from and including the dated date hereof to the date of
maturity or redemption or acceleration prior to maturity at a rate of 7.375%
comprised of twelve 30-day months. The interest payable on the Bonds as provided
above shall be payable on the first day of each month commencing November 1,
1999, and on each Bond Payment Date.
A-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.
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.
A-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.
A-4
<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:_____________________________
5
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this Bond to be executed as of
the Dated Date stated above.
ARKANSAS DEVELOPMENT FINANCE
AUTHORITY
By /s/ Robert D. Ferguson, Jr.
--------------------------------
Chairman
(SEAL)
ROBERT D. FERGUSON, JR.
ATTEST:
/s/ Rush Deacon
- ------------------------------
RUSH DEACON
<PAGE>
CERTIFICATE OF AUTHENTICATION
This Bond is of the Multifamily Housing Revenue Bonds (Chapel Ridge of
Texarkana Project) Series 1999G of the Arkansas Development Finance Authority.
BANK OF OKLAHOMA, N.A.,
as Trustee and Authenticating Agent
By /s/ W. Mark McCoy
--------------------------------
Authorized Signatory
Date of Authentication: September 29, 1999 W. MARK MCCOY
A-2
<PAGE>
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: _________________________ By ______________________________________
Authorized Signature
________________________________
Name of Transferee
________________________________
Signature Guaranteed by
________________________________
Name of Bank
By _____________________________
Title __________________________
Exhibit 10 (aaaaal)
UNITED STATES OF AMERICA
COMMONWEALTH OF VIRGINIA
City of Virginia Beach Development Authority
Multifamily Housing Revenue Bond
(Tallwood Project), Series 1999
Number: R-1
Dated Date: September 30, 1999
Maturity Date: October 15, 2041
Registered Owner: Charter Mac Equity Issuer Trust
Principal Amount: $6,205,000.00
Interest Rate: 7.25%
The City of Virginia Beach Development Authority (the "Issuer"), a
political subdivision of the Commonwealth of Virginia (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 First Union National Bank in
Richmond, Virginia, 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, 1999, between
the Issuer and the Trustee (as amended and supplemented from time to time, the
"Indenture"), and Chapter 643 of the Virginia Acts of Assembly of 1964, as
amended, 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 $6,205,000.00 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.
Pursuant to a Loan Agreement dated as of September 1, 1999, and a Promissory
Note (the "Note") dated the date of issuance of the Bonds, Tallwood, L.P., a
Virginia 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.
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. 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, ANTI) THE SECURITY THEREFOR PROVIDED BY THE FIRST DEED OF TRUST
AND SECURITY AGREEMENT FROM THE DEVELOPER FOR THE BENEFIT OF THE TRUSTEE, DATED
AS OF SEPTEMBER 1, 1999, AND THE ASSIGNMENT OF LEASES, RENTS AND OTHER INCOME
FROM THE DEVELOPER TO THE TRUSTEE, DATED AS OF SEPTEMBER 1, 1999, ALL OF WHICH
HAVE BEEN ASSIGNED TO THE TRUSTEE PURSUANT TO THE INDENTURE, AND (II) ANY
ADDITIONAL SECURITY PROVIDED IN THE INDENTURE. Neither the State nor any
political subdivision thereof, including the City of Virginia Beach, Virginia
(the "City"), 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, including the City, 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, including the City, 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 commissioner, 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 and including the dated date
hereof to the date of maturity or redemption or acceleration prior to maturity
at a rate of seven and 25/100 percent (7.25%), such interest to be calculated
based upon a year comprised of twelve 30-day months. The interest payable on the
Bonds as provided above shall be payable on the fifteenth day of each month
commencing October 15, 1999, and on each Bond Payment Date.
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 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 maybe 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.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be executed as of
the Dated Date stated above.
CITY OF VIRGINIA BEACH
DEVELOPMENT AUTHORITY
(SEAL) By: /s/ Stephen W. Burke
-------------------------------------
Chairman
STEPHEN W. BURKE
Attest:
/s/ Robert G. Jones
- ------------------------------
Assistant Secretary
ROBERT G. JONES
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 (Tallwood Project), Series
1999 of the City of Virginia Beach Development Authority.
FIRST UNION NATIONAL BANK,
as and Authenticating Agent
By: /s/ Patricia A. Welling
-------------------------------------
Authorized Signatory
Date of Authentication:
PATRICIA A. WELLING
September 30, 1999
- ----------------------------
4
<PAGE>
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ___________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
SSN or TIN: ____________ the within Bond and hereby authorizes the transfer
of this Bond on the registration books of the Trustee.
Dated: _________________________________
Authorized Signature
Name of Transferor:
________________________________
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>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 9,282,108
<SECURITIES> 600,758,941
<RECEIVABLES> 9,952,299
<ALLOWANCES> 138,000
<INVENTORY> 0
<CURRENT-ASSETS> 302,999
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 635,954,870
<CURRENT-LIABILITIES> 62,244,557
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 326,710,313
<TOTAL-LIABILITY-AND-EQUITY> 635,954,870
<SALES> 0
<TOTAL-REVENUES> 28,231,013
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 9,068,949
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 932,236
<INCOME-PRETAX> 18,229,828
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18,229,828
<EPS-BASIC> .81
<EPS-DILUTED> .81
</TABLE>
