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HomeMy WebLinkAboutRES 84-331 F i Y ` RESOLUTION APPROVING THE ISSUANCE OF BEAU14ONT MULTI-FAMILY HOUSING FINANCE CORPORATION $1 , 900 , 000 MULTI-FAMILY HOUSING REVENUE BONDS, SERIES 1984 (PINEDALE MANOR DEVELOPMENT) WHEREAS , by a duly adopted resolution of the City Council (the "Governing Body") of the City of Beaumont, Texas (the "City") , the Governing Body authorized and approved the creation of the Beaumont Multi-Family Housing Finance Corporation (the "Corporation") pursuant to the Texas Housing Finance Corporations Act , Article 12691-7 , Vernon' s Annotated Texas Civil Statutes , as amended (the "Act") ; and WHEREAS, the Corporation has been duly and properly created and organized as a housing finance corporation under the Act; and WHEREAS, the Act authorizes the Corporation to (i) lend money for corporate purposes ? (ii) issue revenue bonds for the purpose of providing financing for, and to defray in whole or part, the development costs of residential developments located within the City and intended to be occupied substantially (at least 90%) by persons of low and moderate income, as determined in Rules and Regulations adopted by the Board of Directors of the Corporation, and (iii) rent, lease, sell or otherwise dispose of such residential developments , or loan the proceeds of such revenue bonds to any person to defray, in whole or in part, the development costs of any residential development; and WHEREAS , the definition of "residential development" in the Act includes the acquisition, construction, reconstruc- tion, rehabilitation, repair, alteration, improvement, or extension of any land, interest in land, building, structure, facility, system, fixture, improvement , addition, appurte- nance , machinery, or equipment or any combination thereof, all real and personal property deemed necessary in connection therewith, and all real and personal property or improvements functionally related and subordinate thereto , substantially (at least 90%) for use by or intended to be occupied substantially (at least 90%) by persons of low and moderate income , as determined in Rules and Regulations adopted by the Board of Directors of the Corporation; and WHEREAS , the definition of "development costs" in the Act includes the sum total of all reasonable or necessary costs incidental to the providing, acquisition, construction, reconstruction , rehabilitation, repair, alteration, improvement , and extension of a residential development , including, without limitation, the following: the cost of studies and surveys ; plans and specifications ; architectural and engineering services ; financial advisory, mortgage banking and administrative services; underwriting fees ; legal , accounting, marketing, and other special services relating to residential development or incurred in connection with the issuance and sale of bonds; necessary application and other fees to federal , state, and local government agencies for any requisite approvals for construction, for assisted financing or otherwise; financing, acquisition, demolition, constrution, equipment, and site development of new and rehabilitated buildings ; the relocation of utilities , public ways , and parks ; the construction of recreational, cultural , and commercial facilities ; rehabilitation, reconstruction, repair, or remodeling of existing buildings and all other necessary and incidental expenses , including trustee and rating agency fees and an initial bond and interest reserve together with interest on bonds issued to finance a residential development to a date 12 months subsequent to the estimated date of completion; any premiums for mortgage insurance or insurance with respect to bonds ; and such other expenses as the Corporation may deem appropriate to effectuate the purposes of the Act; and WHEREAS , Section 103(b) (4) (A) of the Internal Revenue Code of 1954 , as amended (the "Code") , provides that the interest on industrial development bonds (in the form of fully registered obligations) issued by or on behalf of a state or a political subdivision thereof as part of an issue substantially all (at least 907) of the proceeds of which are to be used to provide projects for residential rental property shall be exempt from federal income taxation if at least 207 of the units in each project are to be occupied by individuals of low or moderate income, within the meaning of Section 103(b) (12) (C) of the Code , at all times during the qualified project period set forth in Section 103 (b) (12) (B) of the Code; and WHEREAS, the Act provides that the proceeds of revenue bonds issued pursuant to the Act may be used to defray, in whole or in part, the development costs of residential developments intended to be occupied substantially (at least 907) by persons of low and moderate income whose adjusted gross income, together with the adjusted gross income of all persons who intend to reside with such persons in one dwelling unit, did not, for the immediately preceding taxable year, exceed the maximum amount established as constituting -2- moderate income in Rules and Regulations adopted by the Board of Directors of the Corporation; and WHEREAS , on June 20 , 1984 , the Corporation duly adopted a RESOLUTION DECLARING INTENT TO ISSUE BONDS TO PROVIDE FINANCING FOR A RESIDENTIAL DEVELOPMENT FOR PERSONS OF LOW AND MODERATE INCOME (PINEDALE MANOR DEVELOPMENT) ; PRESCRIBING CERTAIN TERMS AND CONDITIONS OF SUCH BONDS; AND CONTAINING OTHER PROVISIONS RELATING TO THE SUBJECT, a copyrof which is attached hereto as Exhibit "A" , wherein it is proposed that the Corporation issue its revenue bonds for the purpose of providing tax exempt financing for a multi-family rental residential development (the "Development") consisting of up to 116 dwelling units to be located within the City on the land described in Exhibit "B" , and to be owned by Pinedale Manor, a general partnership, or its permitted assigns (the "Owner") ; and wherein the Corporation has indicated its intent to issue its Multi-Family Housing Revenue Bonds , Series 1984 (Pinedale Manor Development) (the "Bonds") , in the approximate aggregate principal amount of $1 ,900 , 000 to defray, in whole or in part , certain development costs incurred or paid with respect to the Development , subject to the consummation of certain contractual agreements between the Corporation and the Owner and the satisfaction of other conditions set forth in said Resolution; and WHEREAS, the Owner has indicated its willingness to enter into contractual agreements with the Corporation providing assurance satisfactory to the Corporation that at least 907 of the dwelling units comprising the Development will be occupied at all times by persons of low and moderate income, as determined in accordance with the Rules and Regulations adopted by the Board of Directors of the Corporation, that the Development will serve or be available for general public use in accordance with Treas . Reg. §1. 103-8 (a) (2) and shall be used otherwise than on a transient basis (within the meaning of the Code and the Regulations promulgated thereunder) , and that substantially all (at least 927) of the proceeds of the issuance of the Bonds will be used to provide projects for residential rental property, at least 207 of which project units will be occupied (or held vacant and available for occupancy) by individuals of low or moderate income within the meaning of Section 103(b) (12) (c) of the Code at all times during the qualified project period set forth in Section 103(b) (12) (B) of the Code; and WHEREAS, the Corporation proposes .to adopt substantially in the form attached as Exhibit "C" a RESOLUTION AUTHORIZING -3- THE ISSUANCE OF BEAUMONT MULTI-FAMILY HOUSING FINANCE CORPORATION $1 , 900 , 000 MULTI-FAMILY HOUSING REVENUE BONDS , SERIES 1984 (PINEDALE MANOR DEVELOPMENT) , THE EXECUTION OF A TRUST INDENTURE AND OTHER RELATED DOCUMENTS, AND ADOPTION OF CERTAIN RULES AND REGULATIONS , wherein the Corporation proposes to approve the Development and authorize and direct the issuance of the Bonds to finance and defray, in whole or in part, the development costs of the Development, in accordance with the terms , conditions and provisions of such Resolution; and WHEREAS, the Governing Body has determined that the issuance of the Bonds and the approval of the Development will further the public purposes of the Act, and desires to approve and authorize the proposed Development and the issuance of the Bonds by the Corporation to finance and defray, in whole or in part, certain development costs of the Development; and WHEREAS , as a prerequisite to the exemption from federal income tax of interest on obligations issued pursuant to Sectin 103 (b) (4) (A) of the Code , Section 103 (k) of the Code provides that such issue must be approved by the applicable elected representative of the governmental unit on whose behalf such obligations are issued and each governmental jurisdiction over the area in which any facility to be financed from the proceeds of such issue is located (except that if more than one governmental unit has jurisdiction over the entire area in which such facility is located, only one governmental unit need approve the issue) , only after a public hearing has been held; and WHEREAS , the City is a "governmental unit" within the meaning of the Code; and WHEREAS, as the elected legislative body of the governmental unit within which the entire Development is located, the Governing Body is an "applicable elected representative" of the governmental unit with specific authority within the meaning of Section 103(k) of the Code; and WHEREAS, the facilities comprising the Development are looated entirely within the geographic jurisdiction of the City, thus necessitating only one public hearing and approval pursuant to Section 103(k) of the Code; and WHEREAS, in compliance with Section 103(k) of the Code, and the Open Meetings Law, as amended, Article 6252-17 , -4- Vernon' s Annotated Texas Civil Statutes , notice in writing of a public hearing to approve issuance of the Bonds has been published in a newspaper of general circulation in the City on August 24 , 1984 , and September 7 , 1984 , and written notice has also been posted continuously at the Jefferson County Courthouse in Beaumont, Texas , since-September 14 , 1984 , and pursuant to such notice, the Governing Body has this day held a public hearing for the purpose of considering the authorization and approval of the proposed Development and the issuance of the Bonds ; and WHEREAS, this public hearing has been conducted in order to provide an opportunity for persons with differing views on both the authorization and issuance of the Bonds and the location and nature of the Development to be heard, and in order to comply with Section 103(k) of the Code and the Act; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT, TEXAS : Section 1 . The Governing Body hereby finds , determines , recites and declares that the issuance of the Bonds to provide tax exempt financing for the proposed Development, and the approval of the proposed Development, is in furtherance of and will promote the public purposes of the Act, including, without limitation, assisting person:; of low and moderate income to obtain decent, safe and sanitary housing at rentals they can afford. Section 2 . The Governing Body, as the elected legislative moody of the City, and for the purposes of complying with the terms and provisions of Section 103(b) (4) (A) and 103(k) of the Code and the Act, does hereby approve, ratify, adopt and confirm the Resolutions of the Corporation, in substantially the forms attached hereto as Exhibits "A" and "C"; and does hereby approve and authorize the Development contemplated in such Resolutions and the issuance of the Bonds by the Corporation in the . amount and for the purposes therein expressed, including, without limitation, the financing of development costs in connection with the proposed Development. Section 3 . The Governing Body has considered evidence of the publication and posting of notice of this meeting and public hearing and officially finds , determines , recites , and declares that a sufficient written and reasonable public notice of the date, hour and place of this meeting and public hearing and of the subject matter of this Resolution, was published in a- newspaper of general -5- circulation in the City not less than fourteen (14) days prior to this meeting and public hearing, and thereafter weekly; that such meeting and public hearing was open to the public as required by law at all times during which this Resolution and the subject matter hereof were discussed, considered, and tormally acted upon,; that the giving of notice in the manner provided above was reasonably designed to apprise residents of the City of the proposed authorization and issuance of the Bonds and approval of the Development; that the meeting and public hearing was conducted in a manner that provided a reasonable opportunity for persons with differing views on the issuance of the Bonds and the nature and location of the Development facilities to be heard; and that this meeting and public hearing was held at a time and place convenient for persons affected by the financing of the Development and issuance of the Bonds; and that the foregoing notice and hearing complied with the Open Meetings Law, as amended, Article 6252-17 , Vernon' s Annotated Texas Civil Statutes , and Section 103(k) of the Code. PASSED, ADOPTED AND APPROVED THIS i H DAY OF SEPTEMBER, 1984 . TENOR EXHIBITS : "A" - Resolution Declaring Intent "B" - Site of Development "C" - Resolution Authorizing Issuance -6- RESOLUTION DECLARING INTENT TO ISSUE BONDS TO PROVIDE FINANCING FOR A RESIDENTIAL DEVELOPMENT FOR PERSONS OF LOW AND MODERATE INCOME (PINEDALE MANOR DEVELOPMENT) ; PRESCRIBING CERTAIN TERMS AND CONDITIONS OF SUCH BONDS; AND CONTAINING OTHER PROVISIONS RELATING TO THE SUBJECT WHEREAS , Beaumont Multi-Family Housing Finance Corporation (the "Corporation") has been duly and properly created and organized under the Texas Housing Finance Corporations Act, Article 12691-7 , Vernon' s Annotated Texas Civil Statutes , as amended (the "Act") ; and WHEREAS , the Act authorizes the Corporation to issue revenue bonds for the purpose of providing financing for residential developments located within the City of Beaumont, Texas (the "City") , and intended to be occupied substantially (at least 90 percent) by persons of low and moderate income, as determined by the Board of Directors of the Corporation; and WHEREAS , Section 103 (b) (4) (A) of the Internal Revenue Code of 1954 , as amended (the "Code") , provides that the interest on fully registered obligations issued by or on behalf of a state or a political subdivision thereof substantially all of the proceeds of which are to be used to provide projects for residential rental property shall be exempt from federal income taxation if at least 20 percent of the units in each project are to be occupied by individuals of low or moderate income , within the meaning of Section 103 (b) (12) (C) of the Code at all times during the qualified project period set forth in Section 103(b) (12) (B) of the Code; and WHEREAS , it is proposed that the Corporation issue its revenue bonds for the purpose of providing financing for a multi-family rental residential development (the "Development") consisting of up to 116 units to be located within the City on the land described in Exhibit "A" attached hereto , and to be owned by Pinedale Manor Venture, a joint venture, or its permitted assigns (the "Owner") ; and WHEREAS , the Owner has indicated its willingness to enter into contractual arrangements with the Corporation providing assurance satisfactory to the Corporation that at least 90 percent of the Development units will be occupied at all times by persons of- low and moderate income , as determined by the Board of -Directors of the Corporation, and �1 EXHIBIT A that at least 20 percent of the Development units will be occupied (or held vacant and available for occupancy) by individuals of low or moderate income within the meaning of Section 103 (b) (12) (C) of the Code at all times during the qualified project period set forth in Section 103(b) (12) (B) of the Code; and WHEREAS, the Board of Directors of the Corporation desires to take official action declaring the Corporation' s intent to issue revenue bonds to provide financing for the Development upon the terms and conditions hereinafter set forth; NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF BEAUMONT MULTI-FAMILY HOUSING FINANCE CORPORATION: Section 1. That the Corporation hereby declares its intent to issue its Multi-Family Housing Revenue Bonds , Series 1984 (Pinedale Manor Development) (the "Bonds") , in an aggregate principal amount not to exceed $2 , 000 , 000 , which amount is estimated to be sufficient: (a) to fund a loan to provide financing for the acquisition, construction, equipping and furnishing of the Development; (b) to fund certain reserves for the benefit of the holders of the Bonds ; and (c) to pay certain costs incurred in connection with the issuance of the Bonds . Section 2. That the Bonds shall be issuable as fully registered bonds in the denomination of $5 , 000 or any integral multiple thereof; shall bear interest at a rate or rates determined by the Corporation, which interest shall be payable on a monthly basis; shall be payable in equal principal installments on a monthly basis ; and shall be subject to prior redemption upon such terms and conditions as may be established by the Corporation. Section 3 . That the Bonds shall be special, limited obligations of the Corporation payable solely from the revenues received by the Corporation from or in connection with its loan to provide financing for the Development and from such other amounts as may be obtained through the exercise of the remedies provided in the financing documents upon the occurrence of an event of default. Section 4 . That the Board of Directors hereby finds , determines , recites and declares that the Bonds shall not constitute an indebtedness , liability, general , special or moral obligation or pledge or loan of the faith or credit -2- or taxing power of the State of Texas , the City or any other political subdivision or municipal or political corporation or governmental unit, nor shall the bonds ever be deemed to be an obligation or agreement of any officer, director, agent or employee of the Corporation in his or her individual capacity, and none of such persons shall be subject to any personal liability by reason of issuance of the Bonds . Section 5 . That the issuance of the Bonds shall be subject to : (a) the execution by the Owner and the Corporation of contractual arrangements providing assurance satisfactory to the Corporation that at least 90 percent of the Development units will be occupied at all times by persons of low and moderate income as determined by the Board of Directors of the Corporation, and that at least 20 percent of the Development units will be occupied (or held vacant and available for occupancy) by individuals of low or moderate income within the meaning of Section 103 (b) (12) (C) of the Code at all times during the qualified project period set forth in Section 103 (b) (12) (B) of the Code; and (b) the receipt of a ruling from the Internal Revenue Service or an opinion from Orgain, Bell & Tucker, or other bond counsel, substantially to the effect that the interest on the Bonds is exempt from federal income taxation under existing statutes , regulations, published rulings and judicial decisions. Section 6 . That the Board of Directors of. the Corporation hereby finds , determines , recites and declares that the issuance of the Bonds to provide financing for the Development will promote the public purposes set forth in Section 3 of the Act, including, without limitation, assisting persons of low and moderate income to obtain decent, safe and sanitary housing at rentals they can afford. Section 7 . That the Board of Directors hereby finds , determines , recites and declares the Corporation' s intent that this Resolution constitute an official action toward the issuance of the Bonds within the meaning of Section 1. 103-8 (a) (5) (iii) , Title 26 , Code of Federal Regulations , as amended, and applicable rulings of the Internal Revenue Service thereunder, to the end that the Bonds may qualify for the exemption provisions of Section 103 (b) (4) of the Code and that the interest on the Bonds will therefore be excludable from the gross incomes of the holders thereof under the provisions of Section 103(a) (1) of the Code. -3- Section 8 . The Owner may, with the consent of the Corporation, transfer or assign any or all of its rights and delegate any or all of its duties hereunder to any other person or entity designated by the Owner, but no such transfer, assignment or delegation shall, without the written consent and approval of the Corporation, relieve the Owner of its liability for payment of costs as to which the Owner has agreed to indemnify the Corporation. 1984 . PASSED AND APPROVED this c,?47 day of , BEAUMONT MULTI-FAMILY HOUSING FINANCE/CORPORATION �— By: �+• v Its : ATTEST: A4 ret y �.: (SEAL) -4- EXHIBIT "A" PINEDALE MANOR DEVELOPMENT All that certain lot , tract, or parcel of land, being Lot Number One (1) , in Block Number Orre (1) , of GRIFFING VILLA UNIT 1 , an Addition to the City of Beaumont , Jefferson, County, Texas , according to the Amended Final Plat thereof recorded in Vol. 14 , Page 51 of the Map Records of Jefferson County, Texas Site of Development: All that certain lot, tract, or parcel of land, being Lot Number One (1) , in Block Number One (1) , of GRIFFING VILLA UNIT 1 , an Addition to the City of Beaumont, Jefferson County, Texas , according to the Amended Final Plat thereof recorded in Vol . 14 , Page 51 of the Map Records of Jefferson County, Texas . a EXHIBIT B RESOLUTION f AUTHORIZING THE ISSUANCE OF BEAUMONT MULTI-FAMILY HOUSING FINANCE CORPORATION $1 , 900 , 000 MULTI-FAMILY HOUSING REVENUE BONDS , SERIES 1984 (PINEDALE MANOR DEVELOPMENT) , THE EXECUTION OF A TRUST INDENTURE AND OTHER RELATED DOCUMENTS , AND ADOPTION OF CERTAIN RULES AND REGULATIONS EXHIBIT C TABLE OF CONTENTS (The Table of Contents is not a part of the Resolution but is for convenience of reference only) PAGE Title. . . . . . . . . . . . . . . . . . . . . . . . . . . .... . 1 Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Resolution. . . . . . . . . . . . . . . . . . . . . . . . . 3 SECTION 1 . APPROVAL OF TRANSACTION. . . . . . . . . . . . 3 (a) Approval of the Bonds. . . . . . . . . 3 (b) Approval of the Agreement and the Regulatory Agreement. . . . . . 4 (c) Requirement as to the Deed of Trust and Collateral Assignment. . . . . . . . . . . . . . . . . . . . 5 (d) Requirement as to Guarantee Agreement. . . . . . . . . . . 5 (e) Approval of Sale of the Bonds . 6 (f) Conditions Precedent to Closing of the Transaction. . . . 5 (g) Issuance Furthers the Purposes of the Act. . . . . . . . . . . 7 (h) Incorporation by Reference. . . . 7 (i) Additional Authorizations to Officers of the Corporation. . . 7 (j ) Effective Date of the Bond Resolution. . . . . . . . . . . . . . . . . . . . 7 (k) Defined Terms. . . . . . . . . . . . . . . . . 7 SECTION 2. DATE, DENOMINATION, NUMBERS , AND MATURITIES OF THE BONDS. . . . . . . . . . . . 8 SECTION 3. INTEREST ON THE BONDS. . . . . . . . . . . . . . 8 SECTION 4 . GENERAL CHARACTERISTICS OF THE BONDS. . . . . . . . . . . . . . . . . . . . . . . . . . 8 (a) In General. . . . . . . . . . . . . . . . . . . 8 (b) RegistrationBooks . . . . . . . . . 8 (c) Payment to Registered Holder. . 9 (d) Notation of Prepayment. . . . . . . . 9 (i) SECTION 5 . FORM OF BOND. . . . . . . . . . . . . . . . . . . . . . . 10 SECTION 6 . PLEDGE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 SECTION 7 . DEBT SERVICE FUND. . . . . . . . . . . . . . . . . . 23 (a) Establishment of Debt Service Fund. . . 23 (b) Accrued Interest. . . . . . . . . . . . . . 23 (c) Installment Loan Payments . . . . . 23 (d) Redemption. . . . . . . . . . . . . . . . 25 (e) Payments from Debt Service Fund. . . . . . . . . . . . . . 25 (f) Immediately Available Funds. . . 25 (g) Investment of Funds . . . . . . . . . . . 25 SECTION 8 . SECURITY FOR FUNDS. . . . . . . . . . . . . . . . . 26 SECTION 9. THE OWNER' S PAYMENTS. . . . . . . . . . . . . . . 26 (a) Nature of Owner ' s Obligation. . 26 (b) Prepayments. . . . . . . . . . . . . . . . . . . 27 SECTION 10 . ADDITIONAL PARITY BONDS. . . . . . . . . . . . 27 (a) Additional Bonds . . . . . . . . . . 27 (b) Amendments to Trust Indenture Unnecessary. . . . . . . . . . . . . . . . . . . 28 SECTION 11. SPECIAL COVENANTS. . . . . . . . . . . . . . . . . . 29 (a) Installment Loan Payments Pledged to Bonds Only. . 29 (b) Non-Encumbrance. . . . . . . . . . . . . . 29 (c) Performance by Corporation. . . . 29 (d) Certain Modifications Prohibited. . . . . . . . . . . . . . . . . . . . 29 SECTION 12. THE BONDS ARE SPECIAL OBLIGATIONS. . 30 SECTION 13 . AMENDMENTS. . . . . . . . . . . . . . . . . . . . . . . . . 30 (a) Amendment with Consent of Holders of 75% of the Bonds . . . 30 (b) Notice- of Amendment. . . . . . . . . . . 31 (c) Consent to Amendment. . . . . . . . . . 32 (d) Effect of Amendment. . . . . . . . . . . 32 (e) Consent of Bondholders . . . . . . . . 32 (ii) (f) Ownership of the Bonds . . . . . . . . 33 (g) Amendments Without Consent. . . . 33 (h) Special Exception. . . . . . . . . . . . . 33 SECTION 14 . ESTABLISHMENT OF CONSTRUCTION FUND. 33 (a) Deposit of Bond Proceeds into Construction Fund. . . . . . . . . . . . . 33 (b) Investment of Money in Construction Fund. . . . . . . . . . . 34 (c) Deposit of Accrued Interest, Income, and Profits. . . . . . . . . . . 34 SECTION 15 . PAYMENTS FROM CONSTRUCTION FUND. . . . 35 (a) Corporation' s Administrative Overhead Expenses and Other Costs . . . . . . . . . . . . 35 (b) Reimbursement for and Pay- ment of Cost of the Development. . . . . . . . . . . . . . . . . . . 35 (c) Reliance by Trustee. . . . . . . . . . . 36 SECTION 16 . SURPLUS CONSTRUCTION FUNDS. . . . . . . . . 36 (a) Disposition of Surplus Funds . . . 36 (b) Disposition of Construction Fund upon Acceleration and Redemption. . . . . . . . . . . . . . . . . . . . 37 SECTION 17 . DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED BONDS. . . . . . . . . . . . . . . . . 37 (a) Replacement Bonds. . . . . . . . . . 37 (b) Application for Substitute Bonds . . . . . . . . 37 (c) - No Default Occurred. . . . 38 (d) Charge for Issuing Substitute Bonds. . . . . . . 38 (e) Authority for Issuing Substitute Bonds . . . . . . . . . . . . . . 38 SECTION 18. NO ARBITRAGE. . . . . . . . . . . . . . . . . . . . . . . 38 SECTION 19. ADOPTION OF RULES AND REGULATIONS AS TO LOW AND MODERATE INCOME LEVELS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 (iii) EXHIBITS "A" Trust Indenture "B" Loan Agreement "C" Regulatory Agreement and Declaration of Restrictive Covenants "D" Deed of Trust , Assignment of Rents and Security Agreement "E" Collateral Assignment and t Security Agreement "F" Guarantee Agreement "G" Letter of Representation "H" Investment Letter (iv) RESOLUTION AUTHORIZING THE ISSUANCE OF BEAUMONT MULTI-FAMILY HOUSING FINANCE CORPORATION MULTI-FAMILY HOUSING REVENUE BONDS , SERIES 1984 (PINEDALE MANOR DEVELOPMENT) , THE EXECUTION OF A TRUST INDENTURE AND OTHER RELATED DOCUMENTS , AND ADOPTION OF CERTAIN RULES AND REGULATIONS WHEREAS , Beaumont Multi-Family Housing Finance Corporation (the "Corporation") has been duly created and organized pursuant to and in accordance with the provisions of the Texas Housing Finance Corporations Act, Article 12691-7 , Vernon' s Annotated Texas Civil Statutes , as amended (the "Act") ; and WHEREAS , the Act authorizes the Corporation to issue revenue bonds for the purposes of providing financing for and to loan sufficient funds to any person to defray in whole or in part the development costs of residential developments located within the City of Beaumont, Texas (the "City") , and intended to be occupied substantially (at least 907) by persons of low and moderate income as determined in Rules and Regulations adopted by the Board of Directors of the Corporation (the "Board") ; and WHEREAS , Section 103(b) (4) (A) of the Internal Revenue Code of 1954 , as amended (the "Code") , provides that the interest on fully registered obligations issued by or on behalf of a state or a political subdivision thereof, substantially all of the proceeds of which obligations are to be used to provide projects for residential rental property, shall be exempt from federal income taxation if at least 207 of the dwelling units in each project are to be occupied by individuals of low or moderate income , within the meaning of Section 103 (b) (12) (C) of the Code at all times during the qualified project period set forth in Section- 103 (b) (12) (B) of the Code; and. WHEREAS , the Board adopted a resolution on June 20 , 1984 (the "Inducement Resolution") , whereby in accordance with the provisions of the Act, the Corporation has agreed to issue its revenue bonds for the purpose of providing- tinancing for a multi-family residential development (the "Development") consisting of up to 116 dwelling units to be constructed by Pinedale Manor (the "Owner") and to be located within the City on the real estate which was initially described in Exhibit "A" to the Inducement Resolution and which is more fully described in the hereinafter described Loan Agreement; and WHEREAS , for purposes of financing the Development, the Corporation now desires to (i) authorize the issuance of its Multi-Family Housing Revenue Bonds ,.. Series 1984 (Pinedale Manor Development) (the "Bonds") , in the maximum aggregate principal amount of $1, 900 , 000 , pursuant to the terms and provisions of a trust indenture , (ii) provide for the sale of the Bonds to the purchasers described herein, (iii) provide for the payment of the principal of and premium, if any, and liquidated damages , if any, and interest on the Bonds with revenues derived from the loan of proceeds of the sale of the Bonds (except for any amount representing accrued interest on the Bonds) to the Owner pursuant to the terms and provisions of a loan agreement and (iv) take and authorize certain other actions in connection with the foregoing; and WHEREAS, on September 18 , 1984 , after a public hearing as required by and in compliance with Section 103 (k) of the Code , the City adopted a written resolution specifically approving the Development, the Inducement Resolution, this Resolution, and the issuance of the Bonds; and WHEREAS , pursuant to the terms of the hereinafter described Loan Agreement and the hereinafter described Regulatory Agreement, the Owner has agreed and covenanted with the Corporation that (i) in accordance with the Act, at least 90% of the dwelling units in the Development will be occupied at all times by persons of low and moderate income, as determined in Rules and Regulations adopted by the Board on behalf of the Corporation, and (ii) in accordance with the Code, at least 20% of the dwelling units in the Development will be occupied (or held vacant and available for occupancy) by individuals of low or moderate income within the meaning of Section 103 (b) (12) (C) of the Code at all times during the qualified project period set forth in Section 103 (b) (12) (B) of the Code; and WHEREAS , by the terms of this resolution the Board has found and determined under the Act and adopted as a part of the Rules and Regulations of the Corporation effective as of January 1 , 1984 , that for purposes of occupancy of dwelling units in the Development, a person of low or moderate income shall be a person whose adjusted gross income, together with the adjusted gross incomes of all persons who intend to reside with such person in one dwelling unit, did not exceed $ for the calendar year 1983 ; and -2- WHEREAS , the Board has examined proposed forms of a trust indenture , a note, a loan agreement, a regulatory agreement and a declaration of restrictive covenants , a collateral assignment and security agreement, a letter of representation and an investment letter, all comprising a part of this resolution, and the Board finds the form and substance of such documents to be satisfactory and that the recitals and findings contained therein are true, correct and complete and hereby adopts and incorporates by reference such recitals and findings as if set forth in full in this resolution, and finds that it is in the best interest of the public and the Corporation and will assist in carrying out the public purpose of the Corporation and the Act to authorize the execution and delivery of such documents; and WHEREAS , the Board has examined the proposed form of a guarantee agreement pursuant to which W. H. Watkins , Jr. , and B. R. Casey (the "Guarantors") agree on a proportionate basis to guarantee payment of the principal of and premium, if any, and liquidated damages , if any, and interest on the Bonds , and the Board finds the form and substance of such document to be satisfactory and that the agreement of the Guarantors as contained therein constitutes a material inducement to the Corporation to issue and sell the Bonds and ir. reliance thereon, the Board is willing to adopt this resolution and authorize the actions to be taken hereunder; and WHEREAS, the Board has examined the proposed form of a deed of trust, assignment of rents and security agreement from the Owner to Bruce H. Whitehead, as mortgage trustee, for the benefit of the Corporation, and the Board finds the form and substance of such document to be satisfactory; NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF BEAUMONT MULTI-FAMILY HOUSING FINANCE CORPORATION, THAT: Section 1. APPROVAL OF TRANSACTION. (a) Approval of the Bonds . The Corporation hereby authorizes and directs the issuance of the Bonds in the maximum aggregate principal amount of $1,900 , 000 , in accordance with a trust indenture substantially in the form of the Trust Indenture, dated as of October 1, 1984 (the "Trust Indenture") , by and between the Corporation and Allied Merchants Bank, as trustee (the "Trustee") , attached to this resolution as Exhibit "A" , the form, terms and provisions of the Trust Indenture and the Bonds being hereby -3- authorized and approved, and the President and any Vice President of the Corporation are hereby severally authorized and directed to execute and deliver such Indenture and the Bonds on behalf of the Corporation, and the Secretary or any Assistant Secretary of the Corporation is hereby authorized to attest and affix the Corporation' s seal thereto, with such changes therein as the officers executing the same may approve, such approval to be conclusively evidenced by such execution thereof. r. (b) Approval of the-Agreement and the Re ulator Agreement. T e loan o the proceeds o the sale o the Bonds (except for any amount representing accrued interest on the Bonds) by the Corporation to the Owner in order to provide financing for the costs of the Development shall be effected pursuant to the terms and provisions of a loan agreement substantially in the form of the Loan Agreement dated as of October 1 , 1984 (the "Agreement") , by and between the Corporation and the Owner, attached to this resolution as Exhibit "B" , the form, terms and provisions of the Agreement being hereby authorized and approved, and the President and any Vice President of the Corporation are hereby severally authorized and directed to execute and deliver the Agreement on behalf of the Corporation, and the Secretary or any Assistant Secretary of the Corporation is hereby authorized to attest and affix the Corporation' s seal thereto , with such changes therein as the officers executing the same may approve , such approval to be conclusively evidenced by such execution thereof. In order to ensure that the Development shall be owned, constructed, used and operated in accordance with the Act and the Code, the Corporation, the Owner and the Trustee shall execute and deliver a regulatory agreement and declaration of restrictive covenants substantially in the form of the Regulatory Agreement and Declaration of Restrictive Covenants dated as of October 1 , 1984 (the "Regulatory Agreement") attached to this Resolution as Exhibit "C" , the form, terms and provisions of the Regulatory Agreement being hereby authorized and approved, and the President and any Vice President of the Corporation are hereby severally authorized and directed to execute and deliver the Regulatory Agreement on behalf of the Corporation, and the Secretary or any Assistant Secretary is hereby authorized to attest and affix the Corporation' s seal thereto, with such changes therein as the officers executing the same may approve, such approval to be conclusively evidenced by such execution thereof. -4- (c) Requirement as to Deed of Trust and Collateral Assignment. As a condition to the actions authorized in this Section, the Owner shall have executed a deed of trust , assignment of rents and security agreement substantially in the form of the Deed of Trust, Assignment of Rents and Security Agreement dated as of October 1, 1984 (the "Deed of Trust") , from the Owner to Bruce H. Whitehead, as mortgage trustee , for the benefit of the Corporation, attached to this resolution as Exhibit "D" , the form, terms and provisions thereof being hereby authorized and approved. The assignment of the Corporation' s rights under the Deed of Trust and the Note (as defined therein) to the Trustee for the benefit of the holders of the Bonds , shall be effected pursuant to the terms and provisions of a collateral assignment and security agreement substantially in the form of the Collateral Assignment and Security Agreement dated as of October 1 , 1984 (the "Collateral Assignment") , from the Corporation to the Trustee , and attached to this Resolution as Exhibit "E" , the form, terms and provisions of the Collateral Assignment being hereby authorized and approved, and the President and any Vice President of the Corporation are hereby severally authorized and directed to execute and deliver the Collateral Assignment on behalf of the Corporation, and the Secretary or any Assistant Secretary is hereby authorized to attest and affix the Corporation' s seal thereto, with such changes therein as the officers executing the same may approve, such approval to be conclusively evidenced by such execution thereof. (d) Requirement as to Guarantee Agreement. As a condition to the actions authorized in t is Section, the Guarantors shall have executed a guarantee agreement substantially in the form of the Guarantee Agreement dated as of October 1 , 1984 (the "Guarantee") , from the Guarantors to the Trustee , attached hereto as Exhibit "F" , the form, terms and provisions of the Guarantee being hereby authorized and approved. (e) Approval of Sale of the Bonds. The sale and delivery of the Bonds y t e Corporation to the following named purchaser (the "Purchaser") is hereby approved and authorized at the par value thereof plus accrued interest from the date of the Bonds until the date of delivery and payment for the Bonds (the "Closing Date") : -5- PURCHASER PRINCIPAL AMOUNT Allied Bank Beaumont, N.A. $ 1, 900 , 000 (f) Conditions Precedent to Closing of the Transaction, The actions and obligations authorized in this Section shall be subject to and conditioned upon the receipt by the Corporation, the Trustee and the Purchaser on the Closing Date (as hereinafter defined) of (i) aeletter of representation from the Owner and the Guarantors , duly authorized and executed by the Owner and the Guarantors , substantially in the form of the Letter of Representation, dated the Closing Date (the "Letter of Representation") and attached to this resolution as Exhibit "G" , the form, terms and provisions of the Letter of Representation being hereby authorized and approved and the President and any Vice President of the Corporation are hereby severally authorized to signify the Corporation' s acceptance and confirmation of such Letter of Representation by executing the same on behalf of the Corporation in multiple counterparts ; (ii) an investment letter, duly authorized and executed by the Purchasers (as hereinafter defined) , substantially in the form of the Investment Letter, dated the Closing Date (the "Investment Letter") and attached to this resolution as Exhibit "H" , the form, terms and provisions of such Investment Letter being hereby authorized and approved; (iii) the purchase price for the Bonds ; (iv) the general partnership agreement of the Owner; (v) a mortgagee ' s policy of title insurance which is issued by a company acceptable to the Corporation and the Purchaser in an amount equal to $1 , 900 , 000 and which reflects no title matters objectionable to the Corporation or the Purchaser and which shall have deleted the standard boundary exception and any reference to subsequent tax assessments; (vi) evidence of the insurance coverage required pursuant to the Agreement; (vii) a set of plans and specifications with respect to the Development; (viii) a cost break down as to the Development; (ix) a current survey of the Development Site showing no matters objectionable to the Corporation or the Purchaser; (x) evidence that the Development is not located in a flood plain or flood-prone area or evidence of flood insurance if required by applicable law; (xi) evidence as to availability of utilities at the Development Site; (xii) evidence as to the Development ' s compliance with applicable laws and regulations; and (xiii) such opinions , evidences , certificates , instruments or other documents as shall be requested by the Corporation' s , the Trustee' s or the Purchaser' s Counsel or by Bond Counsel, to evidence due performance or satisfaction by the Owner at or prior to such -6- time of all agreements then to be performed and all conditions then to be satisfied by it. (g) Issuance Furthers the Purposes of the Act. The Board of Directors of the Corporation hereby rinds , determines , recites and declares that the issuance of the Bonds on the terms and conditions set out in this resolution so as to provide financing for the Development is in furtherance of and will promote the public purposes set forth in Section 3 of the Act , including without limitation assisting persons of low and moderate income to obtain decent , safe and sanitary housing at rentals they can afford. (h) Incorporation by Reference. All of the terms and provisions of the documents attached as Exhibits "A" through "H" to this resolution shall be and the same are hereby made a part of this resolution. (i) Additional Authorizations to Officers of the Cor o- ration. The o icers , employees and agents of the Corporation, and each of them, shall be and each is expressly authorized, empowered and directed from time to time and at any time to do and perform all acts and things and to execute, acknowledge and deliver in the name and under the corporate seal and on behalf of the Corporation all certificates , financing statements , instruments and other papers , whether or not herein mentioned, as they may determine to be necessary or desirable in order to carry out the terms and provisions of this resolution and of the Bonds to be issued hereunder, as well as the terms and provisions of the Agreement, the Regulatory Agreement , the Trust Indenture , the Note , the Deed of Trust, the Letter of Representation, the Collateral Assignment and the Guarantee hereby authorized and approved, such determination to be conclusively evidenced by. the performance of such acts and things and the execution of any such certificate, financing statement, instrument or other paper. (j ) Effective Date of the Bond Resolution. This resolution shall take effect and be in full force and effect upon and after its passage. (k) Defined Terms . Unless otherwise indicated, all capitalized terms used herein shall have the meanings set forth in (i) this resolution and (ii) the documents which are incorporated herein pursuant to (h) above. This resolution is sometimes herein referred to as the "Bond Resolution". -7- Section 2 . DATE, DENOMINATION NUMBERS, AND MATURITIES OF THE BONDS . The Bonds initially authorized hereby shall be dated October 1 , 1984 , shall be issued and delivered in the form of fully registered bonds , without coupons , payable in installments to the registered holders thereof, or registered assigns , all in the manner hereinafter provided, with the Bonds to be initially payable to the Purchaser in monthly installments on the dates and in the amounts as set forth in Section 5 hereof and to be numbered and issued as follows : NUMBER PURCHASER DENOMINATION R-001 Allied Bank Beaumont, N.A. $ 1, 900 , 000 Section 3 . INTEREST ON THE BONDS. The Bonds initially authorized hereby shall ear interest on the unpaid balance of the principal amount thereof from October 1, 1984 , to the scheduled due date or to the date of prepayment or redemption of the principal installments of the Bonds prior to the scheduled due date, at a per annum rate equal to the Bond Interest Rate (as defined in Section 5 hereof) . The interest shall be payable on the dates and in the manner provided in Section 5. Section 4. GENERAL CHARACTERISTICS OF THE BONDS. (a) In General. The Bonds initially authorized hereby shall be issued, shall be payable, may or shall be prepaid or redeemed prior to the scheduled principal installment payment dates , may be transferred and assigned, shall have the characteristics , and shall be signed, executed and sealed, all as provided and in the manner indicated in Section 5 . After the Bonds have been authorized to be issued by the Board but prior to the delivery of the Bonds , the Trustee shall authenticate the Bonds by executing the Trustee ' s Certificate of Authentication appearing on the Bonds as provided in Section 5 . In addition, on the date of delivery of the Bonds to the Purchaser, the Trustee shall fill in the date of delivery of the Bonds in the Delivery Certificate appearing on the Bonds as provided in Section 5. (b) Re istration Books . The Corporation shall keep or cause to be kept at the principal corporate trust office of the Trustee books for the registration and transfer of Bonds (the "Bond Registration Books") and the Corporation hereby appoints the Trustee as its registrar and transfer agent (the "Registrar") to keep such books and make such registrations and transfers under reasonable regulations as -8- the Corporation or the Registrar may prescribe; and the Registrar will register or transfer as herein provided any Bonds upon presentation thereof at such office. The Corporation, the Owner and each Bondholder shall have the right to inspect the Bond Registration Books during the normal business hours of the Trustee. upon written request. Registration of the Bonds and ownership thereof may be transferred only on the Bond Registration Books upon surrender of the Bond by the registered holder in person or by his duly authorized attorney, by proper written instrument of transfer , in the form and with guaranty of signatures satisfactory to the Registrar, duly executed by such holder or attorney. Upon such surrender for transfer of registration, the Registrar shall make notation of such transfer on the Bonds in the Assignment section appearing thereon and in the Bond Registration Books. Such transfers of registration shall be made without charge to the holder of such Bonds , but any taxes or other governmental charges required to be paid with respect to the same shall be paid by the Bondholder requesting such transfer of registration, as a condition precedent to the exercise of such privilege. (c) Payment to Registered Holder. The person in whose name any Bond shall be registered on the Bond Registration Books may be deemed and treated as the absolute holder thereof for all purposes of this Bond Resolution and the Trust Indenture whether or not such Bond shall be overdue , and the Corporation, the Trustee, and the Owner shall not be affected by any notice to the contrary; and payment of, or on account of, the principal of, premium, if any, agreed liquidated damages , if any, and interest on any such Bond shall be made only to such registered holder thereof; but such registration may be changed as provided herein. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid. (d) Notation of Prepayment. The Corporation hereby appoints the Trustee as the Paying Agent for the Bonds . Upon the prepayment or partial redemption of any Bond, the Trustee, as Registrar and Paying Agent, shall note in the Prepayment Record appearing on such Bond the amount of such prepayment or redemption, the date said payment was made and the remaining unpaid principal balance of said Bond and shall then have said entry signed by an authorized official of the Trustee. The Trustee shall also record such information in the Bond Registration Books , and the Trustee shall also record in the Bond Registration Books all -9- payments of principal installments on the Bonds when made on their respective due dates . Section 5 . FORM OF BOND. The form of Bond, together with the forms of the various certificates and forms to appear on the Bonds , shall be substantially as follows , with necessary and appropriate variations , omissions , and insertions as permitted or required by this Bond Resolution: -10- FORM OF BOND NO. $ UNITED STATES OF AMERICA STATE OF TEXAS BEAUMONT MULTI-FAMILY HOUSING FINANCE CORPORATION MULTI-FAMILY HOUSING REVENUE BONDS ,. SERIES 1984 (PINEDALE MANOR DEVELOPMENT) BEAUMONT MULTI-FAMILY HOUSING FINANCE CORPORATION (the "Corporation") , being duly created and organized as a housing finance corporation under the Texas Housing Finance Corporations Act , Article 12691-7 , Vernon' s Annotated Texas Civil Statutes , as amended (the "Act") , and acting on behalf of the City of Beaumont , Texas , hereby promises to pay to or its registered assigns , the aggregate principal amount of DOLLARS THIS BOND ATJD THE SERIES OF BONDS OF WHICH IT IS A PART HAVE BEEN ISSUED UNDER AND PURSUANT TO THE ACT, AND DO NOT CONSTITUTE AN INDEBTEDNESS OR OBLIGATION (LEGAL, GENERAL, SPECIAL, MORAL OR OTHERWISE) OF THE CITY OF BEAUMONT, TEXAS (OR ANY OTHER CITY, COUNTY, OR OTHER MUNICIPAL OR POLITICAL CORPORATION OR SUBDIVISION OF THE STATE OF TEXAS) OR OF THE STATE OF TEXAS , OR A LOAN OF CREDIT OF ANY OF THEM, WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISIONS. THIS BOND SHALL BE PAYABLE (i) in principal install- ments on the first day of each month in the 299-month period commencing on the Completion Date described below (the "Principal Payment Period") in the amount of ($ ) Dollars each, (ii) with interest thereon, from October 1 , 1984 , on the balance of said principal amount from time to time remaining unpaid, at a per annum rate equal to the Bond Interest Rate (as hereinafter defined) , and at the maximum lawful per annum rate on overdue principal and, to the extent legally permissible, on overdue interest, with interest being payable on said unpaid principal balance during the period from October 1, 1984 , until this Bond is fully paid, on the first day of each month commencing December 1 , 1984 , and (iii) in a final installment of all unpaid principal and interest owing on this Bond on the first day of the month immediately following the last scheduled principal -11- installment payment date described in clause (i) above; provided that such principal and interest are payable solely from the sources and in the manner hereinafter described, and solely as provided in the Act. For purposes of this Bond, the "Completion Date" shall be the earlier of (i) the first day of the month following the month in which the Completion Certificate shall be issued pursuant to the Agreement (as hereinafter defined) or (ii) April 1, 1986 . THE TERM "BOND INTEREST RATE" shall mean a variable per annum rate equal to 7 of the prime commercial lending rate per annum as announced by Allied Bank Beaumont, N.A. , at its principal off ice in Beaumont, Texas (or 7 of such prime commercial lending rate from and after a Rate Escalation Event described in the Agreement) , as in effect from time to time during any interest period (the "Prime Rate") , adjusted daily, but in no event shall the Bond Interest Rate ever be less than 7 or greater than 157 per annum. Notwithstanding the o g oing, in no event shall the amount of the "net interest cost" on the Bonds (as hereinafter defined) exceed the maximum amount which will produce a "net effective interest rate" of 157 , or such greater rate allowed from time to time by law as hereafter may be in effect (such applicable "net effective interest rate" being referred to herein as the "Maximum Rate") , and excess interest, if any, shall be credited on the principal amount of the Bonds (or if the principal amount of the Bonds shall have been paid in full, refunded to the Corporation for payment to the Owner [as hereinafter defined] pursuant to the Agreement) . As used in this paragraph, the terms "net interest cost" and "net effective interest rate" shall have the meanings assigned to them by Article 717k-2 , Vernon' s Annotated Texas Civil Statutes , as amended. Notwithstanding any provision in the Bonds or the Trust Indenture to the contrary, if at any time the Bond Interest Rate exceeds the Maximum Rate, the rate of interest to accrue on the Bonds shall be limited to the Maximum Rate, but any subsequent reductions in the Bond Interest Rate shall not reduce the rate of interest to accrue on the Bonds below the Maximum Rate until the "net Interest Cost" on the Bonds equals the "net interest cost" which would have accrued if a rate per annum equal to the Bond Interest Rate had at all times been in effect. THE PRINCIPAL of and interest on this Bond shall be payable in lawful money of the United States of America, without exchange or collection charges . Payment of principal and interest, shall be made to the registered owner by check or draft mailed or through wire transfer of -12- immediately available funds by Allied Merchants Bank (the "Trustee" , "Paying Agent" , and "Registrar" for this Bond) or its successor appointed under the Trust Indenture (hereinafter defined) , to the registered holder at its address as it appears on the Bond Registration Books kept by the Trustee; provided that in the alternative such payment may be made by any other method requested in writing by the registered holder, subject to the approval of the Trustee. The final payment of principal on this Bond shall be paid only upon surrender of this Bond to the Trustee for cancellation. Any prepayment or redemption of any principal installments of this Bond shall be made only upon presentation of this Bond to the Trustee, who shall make notation of such prepayment or redemption in the Prepayment Record endorsed hereon. THE AMOUNT OF INTEREST to be paid from time to time on this Bond shall be calculated in accordance with the provisions of this paragraph and shall be calculated on the basis of a 360-day year and 30-day months (regardless of the actual number of days in each month) , and the interest shall be calculated to four decimal places . Any prepayments of installments of principal hereof shall be noted by the Trustee on the prepayment record attached hereto. The amount of interest on this Bond deemed payable on each date on which interest is payable (the "Interest Payment Date") shall be computed in accordance with this paragraph. Seven days before each Interest Payment Date prior to the last Interest Payment Date, the Trustee shall compute the amount of interest to be due and payable on such interest payment date based on the Prime Rate in effect on each day included in the related interest payment period. However, the amount of interest to be due and payable in respect of the remaining days of such interest payment period shall be estimated by using the Prime Rate in effect on the date of such calculation. Any difference between the amount of interest due and payable in accordance with the preceding sentence and the amount of interest payable in respect of such remaining days as subsequently computed based on the Prime Rate in effect on each such day, shall be credited or debited, as the case may be, against the amount of interest due and payable on the next succeeding Interest Payment Date. Seven days before each such Interest Payment Date the Trustee shall send to the Owner (as hereinafter defined) by first-class mail notice of the amount of interest so computed to be due and payable on such Interest Payment Date. The amount of interest payable on or after the last Interest Payment Date shall be computed by the Trustee based on the Prime Rate in effect on each day included in the -13- related period, plus any credit or minus any debit due to the computation of interest due on the next preceding date when interest was paid. THIS BOND is one of a series of Bonds dated as of October 1 , 1984 , authorized and issued in the aggregate principal amount of $1, 900 ,000 pursuant to a resolution adopted by the Board of Directors of the Corporation (the "Bond Resolution") on behalf of the City of Beaumont, Texas , all issued or to be issued under a trust indenture , dated as of October 1 , 1984 (the "Trust Indenture") , between the Corporation and the Trustee, pursuant to and in full conformity with the Constitution and the laws of the State of Texas . The Bonds are issued in order to provide funds for the Corporation to lend to Pinedale Manor, a Texas general partnership (the "Owner") , in order to finance the development costs of Pinedale Manor Development (together with the Owner' s interest in the site thereof, the "Development") . Payment of the principal of, and premium, if any, and liquidated damages , if any, and interest on this Bond has been unconditionally guaranteed on a proportionate basis by W. H. Watkins , Jr. , and B. R. Casey pursuant to a guarantee agreement dated as of October 1 , 1984 , between the Trustee and the Guarantors (the "Guarantee") . The proceeds of the sale of the Bonds will be loaned to the Owner pursuant to a loan agreement, dated as of October 1, 1984 (the "Agreement") , between the Corporation and the Owner, and the Owner' s obligations under the Agreement will be further evidenced by the Owner ' s execution and issuance of a note (the "Note") which will be in an amount equal to the aggregate principal amount of the Bonds. Contemporaneously with the execution of the Agreement, the Owner executed a deed of trust, assignment of rents , and security agreement dated as of October 1, 1984 (the "Deed of Trust") , pursuant to which the Owner bargained, sold, granted, conveyed, transferred, mortgaged, pledged and assigned to Bruce H. Whitehead, as mortgage trustee, for the use and benefit of the Corporation, and further granted to the Corporation a security interest in, the Development and certain other properties , in order to secure the payment of the Installment Loan Payments (as defined in the Agreement) and the Note, according to their tenor and effect, and certain other indebtedness of the Owner, and the performance and observance by the Owner of all of the covenants expressed or implied in the Deed of Trust, the Agreement, and the Note; and the Corporation executed a collateral assignment and security agreement dated as of October 1, 1984 (the "Collateral Assignment") , pursuant to which the Corporation conveyed, assigned, transferred and delivered and granted a -14- security interest to the Trustee in the Note and all rights , titles , interests , liens , privileges , claims , demands and equities existing and to exist in connection with or as security for payment of the Note , including its rights , titles and interests arising under the Deed of Trust, in order to secure payment of the Bonds according to their tenor and effect and the performance by the Corporation of all the covenants expressed or implied herein and in the Trust Indenture and the Collateral Assignment; and the Owner , the Corporation and the Trustee executed and delivered a regulatory agreement and declaration of restrictive covenants dated as of October 1 , 1984 (the "Regulatory Agreement") , pursuant to which the Owner agrees to cause the Development to be constructed, owned, used and operated in accordance with the Act and the Code (as hereinafter defined) . ON ANY DATE, the unpaid principal installments of this Bond are subject to optional prepayment or redemption and may be prepaid or redeemed prior to their scheduled due dates , by the Trustee , at the option of the Corporation, upon written notice of the exercise of the option to prepay or redeem delivered to the Trustee by the Corporation not later than the 45th day prior to the date of prepayment or redemption. Such unpaid principal installments may be so prepaid or redeemed as a whole on any date, or in part on any interest payment date (and, if in part, such installment shall be prepaid or redeemed in inverse chronological order of their scheduled due dates , and in amounts not less than all of an unpaid principal installment) , for the principal amount thereof and accrued interest thereon to the date of prepayment or redemption but without any premium. PROMPTLY AFTER ANY DATE ON WHICH the unpaid principal installments of this Bond are subject to mandatory prepayment or redemption as a whole as a result of occurrence of a Taxable Event and a Final Determination of Taxability (as defined in the Agreement) , all such installments shall be prepaid or redeemed prior to their scheduled due dates by the Trustee, with funds which shall be furnished by the Corporation, on the earliest practicable date, and in all events within sixty (60) days , following the latter of such occurrences as provided for in the Agreement. The prepayment or redemption price in such event shall be equal to the unpaid principal amount of this Bond so prepaid or redeemed, plus accrued interest to the date of prepayment or redemption at the Bond Interest Rate, plus an additional amount (the "Redemption Premium") equal to the difference between (i) interest which would have accrued on -15- this Bond from the date of the Taxable Event until the date of prepayment or redemption at a rate equal to the Prime Rate as from time to time in effect during such period plus 17, and (ii) interest which accrued and was payable on this Bond during such period at the Bond Interest Rate, with such additional amount being payable on the prepayment or redemp- tion date and with such amount being the agreed liquidated damages (for loss of a bargain and not as a penalty) which the holder of this Bond will be due as a resulttof the loss of the tax exempt status of the interest on this Bond. Such prepayment or redemption price shall constitute the entire amount due with respect to this Bond as a result of the occurrence of a Taxable Event and a Final Determination of Taxability. IN THE EVENT this Bond has been paid prior to a Final Determination of Taxability, or in the event that notice of prepayment or redemption is given prior to a Final Determination of Taxability, the registered holder of this Bond at the time it is paid shall additionally be entitled to receive the Redemption Premium calculated using the date this Bond is paid in lieu of the actual prepayment or redemption date. ON ANY DATE but only with and to the extent of any surplus funds remaining in the Construction Fund after the completion of the Development as provided and required by Section 16 of the Bond Resolution, the unpaid principal installments of this Bond shall be prepaid or redeemed prior to the scheduled due dates by the Trustee, in inverse chronological order of their scheduled due dates (in the denominations of $1, 000 or any integral multiple thereof or in amounts not less than all of an unpaid principal installment) , at a prepayment or redemption price equal to the principal amount thereof to be prepaid or redeemed plus accrued interest thereon to the date of prepayment or redemption, and without premium. IF THE FULL PRINCIPAL AMOUNT OF THIS BOND IS OTHERWISE UNPAID, and if during the month of March in any year commencing in March of 1986 , (but excluding the year including March of 1988) , the owners of 75% in aggregate principal amount of the Bonds then outstanding shall notify the Trustee in writing that they elect mandatory redemption of their Bonds , then, in such event, the Trustee shall so notify the Corporation and the Owner no later than the tenth day of the next following April, whereupon the Trustee shall redeem on the next following October 1 , with funds provided by the Corporation, this Bond and all other Bonds then -16- outstanding at a redemption price equal to the unpaid principal amount of this Bond and all other Bonds outstanding on such October 1, plus accrued interest hereon to such date , but without premium of any kind. Any Bonds called for redemption pursuant to this paragraph may be purchased by the Owner (or its designee) in lieu of redemption on any such October 1 , upon 5 days ' notice prior thereto , at a purchase price equal to the principal amount of the Bonds to be redeemed plus accrued interest, if any, to the date of such purchase. THE AGREEMENT recites and it is hereby provided that any provision for any payment of this Bond contained herein or in the Agreement shall be held to be subject to reduction to the amount allowed under the usury laws and the public securities laws of the State of Texas as now or hereafter construed by the courts having jurisdiction, and it is agreed by the Corporation and the holder of this Bond that in no event shall usury or any amount in excess of the maximum allowed under such public securities laws be paid or collected with respect to this Bond (whether as or in the form of liquidated damages or otherwise) . AT LEAST 7 DAYS PRIOR to the date fixed for any prepayment or redemption of the unpaid principal installments of this Bond, the Trustee shall cause a written notice of such redemption to be mailed to the registered holder of this Bond addressed to such holder at the address appearing on the Bond Registration Books. By the date fixed for any such prepayment or redemption, due provision shall be made by the Corporation with the Trustee and the Paying Agent for the payment of the principal amount of this Bond which is to be prepaid or redeemed, plus accrued interest thereon to the date fixed for prepayment or redemption, plus any required prepayment or redemption premium, and any other amounts due to the holder of this Bond. If such written notice of prepayment or redemption is given and if due provision for payment of the redemption price is made, all as provided above, the unpaid principal installments of this Bond which are to be prepaid or redeemed, thereby automatically shall be deemed to have been prepaid or redeemed prior to their scheduled due dates , and they shall not bear interest after the date fixed for prepayment or redemption, and they shall not be regarded as being outstanding except for the right of the holder hereof to receive the redemption price from the Paying Agent out of the funds provided for such payment. Upon presentation of this Bond to the Paying Agent, such unpaid principal installments which are to be prepaid or redeemed shall be -17- paid at the redemption price. Except as set forth above , this Bond is not subject to prepayment or redemption prior to maturity. IF THE DATE for the payment of the principal of or interest on this Bond shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city where the Paying Agent is located are authorized by law or executive order to close , then the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday, or day on which banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date of payment. IT IS HEREBY CERTIFIED AND COVENANTED that this Bond has been duly and validly authorized, issued, and delivered; that all acts , conditions , and things required or proper to be performed, exist , and be done precedent to or in the authorization, issuance , and delivery of this Bond have been performed, existed, and been done in accordance with law; that this Bond is a special revenue obligation of the Corporation, and that the principal of and interest on this Bond are payable from and secured by a first lien on and pledge of the payments designated as "Installment Loan Payments" to be made or paid, or caused to be made or paid, to the Trustee, pursuant to the Bond Resolution, the Trust Indenture and the Agreement. The Owner, which is a general partnership organized and existing under the laws of the State of Texas , is obligated to make or pay or cause to be made or paid, without set-off, recoupment, or counterclaim, to the Trustee each such "Installment Loan Payment" for deposit into the Debt Service Fund created for the benefit of the Bonds by the Bond Resolution, in aggregate amounts sufficient to pay and redeem, and provide for the payment and redemption of, the principal of and interest on this Bond, and to pay all other amounts required by the Agreement, the Bond Resolution, and the Trust Indenture when due, subject to and as required by the provisions of the Agreement, the Bond Resolution, and the Trust Indenture. THIS BOND is secured by the Trust Indenture pursuant to the terms of which the Installment Loan Payments are pledged as collateral and the Trustee is custodian of the Debt Service Fund and the Construction Fund and is obligated to enforce the rights of the holder of this Bond and to perform other duties in the manner and under the conditions stated in the Trust Indenture. In case an "Event of Default as defined in the Trust Indenture, shall occur, the unpaid -18- principal installments of this Bond may be declared to be due and payable immediately upon the conditions and in the manner provided in the Trust Indenture. This Bond is additionally secured by the Collateral Assignment of the Corporation' s rights with respect to the Note and the Deed of Trust. Reference is hereby made-to the Bond Resolution, the Trust Indenture , the Deed of Trust, the Agreement, the Regulatory Agreement and the Collateral Assignment for additional provisions with respect to the nature and extent of the security, the rights , duties , and obligations of the Owner , the Corporation, the Trustee, and the holder of this Bond, the terms upon which this Bond is issued and secured, and the modification of any of the foregoing. THE CORPORATION has reserved the right, subject to the restrictions stated in the Bond Resolution and with the consent of the holders of at least 757 in aggregate principal amount of the Bonds and any Additional Bonds then outstanding (as hereinafter defined) , to issue additional parity revenue bonds ("Additional Bonds") which, when issued and delivered, shall be payable from the Debt Service Fund, and shall be payable from and secured by a first lien on the pledge of "Installment Loan Payments" pursuant to the Agreement and entitled to the benefits of and secured by the Trust Indenture, the Collateral Assignment and the Deed of Trust in the same manner and to the same extent as , and shall be on a parity with, this Bond and all then outstanding Additional Bonds . THE CORPORATION also has reserved the right to amend the Bond Resolution and the Trust Indenture , as provided therein; and under some (but not all) circumstances amendments thereto must be approved by the holders of 75% in aggregate principal amount of the Bonds then outstanding and any Additional Bonds then outstanding. THE BONDS AND any coupons appertaining thereto have been issued under and pursuant to the Act, and are limited obligations of the Corporation and shall be payable solely out of the revenues derived from or in connection with the Agreement, including all sums deposited from time to time pursuant to the Agreement, the Trust Indenture and the Note in the Debt Service Fund established under the Trust Indenture, and in certain events out of amounts attributable to Bond proceeds or amounts secured through exercise of the remedies provided in the Trust Indenture, or in the Deed of Trust, or in the Collateral Assignment upon occurrence of an event of default thereunder. Neither the State of Texas nor the City of Beaumont, Texas , nor any political corporation, -19- subdivision or agency of the State of Texas shall be obligated to pay the principal of or premium, if any, or liquidated damages , it any, or interest on the Bonds and neither the faith and credit nor the taxing power of the State of Texas , the City of Beaumont, Texas , or any other political corporation, subdivision Qr agency of the State of Texas is pledged to the payment of the principal of or interest on the Bonds . No recourse under this Bond shall be had against any past, present or future officer;; director, agent , or representative of the Corporation or of the City of Beaumont , Texas . The Bonds shall never be paid in whole or in part out of any funds raised or to be raised by taxation or out of any other revenues of the Corporation, the City of Beaumont, Texas , or the State of Texas except those revenues pledged by the Trust Indenture. THIS BOND may be assigned and shall be transferred only on the Bond Registration Books of the Corporation kept by the Trustee , as Registrar , upon the terms and conditions set forth in the Bond Resolution, the Trust Indenture and the Assignment provisions endorsed hereon. Such transfers shall be without expense to the holder hereof, but any taxes or other governmental charges required to be paid with respect to the same shall be paid by the holder requesting such transfer as a condition precedent to the exercise of such privilege. The registered holder of this Bond may be deemed and treated by the Corporation, the Trustee, and the Owner, as the absolute owner and holder thereof for all purposes , including payment and discharge of liability upon such Bond to the extent of such payment, and the Corporation, the Trustee, and the Owner shall not be affected by any notice to the contrary. THIS BOND shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Trust Indenture until the Trustee' s Certificate of Authentication hereon shall have been signed by the Trustee and the Delivery Certificate hereon shall have been completed. IN WITNESS WHEREOF, this Bond has been signed with the manual or facsimile signatures of the President or any Vice -20- President and the Secretary or Assistant Secretary of the Corporation, and the official seal of the Corporation affixed on this Bond. BEAUMONT MULTI-FAMILY HOUSING ATTEST: FINANCE CORPORATION By: Secretary Its : (SEAL) -21- d FORM OF TRUSTEE ' S CERTIFICATE OF AUTHENTICATION TRUSTEE' S CERTIFICATE OF AUTHENTICATION This Bond is the Bond initially issued under the pro- visions of the within mentioned Agreement, Bond Resolution, and Trust Indenture , on this the day of October , 1984 . ALLIED MERCHANTS BANK By: Its : Authorized Officer TRUSTEE FORM OF ASSIGNMENT ASSIGNMENT FOR VALUE RECEIVED, the registered owner and holder of this Bond last listed below sells , assigns , and transfers the within Bond to the Assignee last listed below, and hereby authorizes the transfer of this Bond on the Bond Registration Books of the Trustee. Such assignment shall not be effective until such Assignee presents this Bond to the Trustee for verification of such assignment and gives the Trustee its address to which payments shall be made and the Trustee makes notation of such Assignment below. DATE OF REGISTERED SIGNATURE ASSIGNMENT OWNER/HOLDER ASSIGNEE OF REGISTRAR -22- FORM OF DELIVERY CERTIFICATE DELIVERY CERTIFICATE THIS BOND was delivered to and paid for by the purchaser hereon on FORM OF PREPAYMENT RECORD PREPAYMENT RECORD Principal Name & Title Signature Date Prepayment Remaining of Authorized of of or Principal Officer Authorized Pmt. Redemption Balance Making Entry Officer -23- Section 6 . PLEDGE. The Bonds and the interest thereon are and shall be payable from and secured by a first lien on and pledge of the payments designated as Installment Loan Payments to be made or paid, or caused to be made or paid, to the Trustee by the Owner, pursuant and subject to the terms and provisions of this Bond .Resolution, the Trust Indenture, and the Agreement; and such Installment Loan Pay- ments are further pledged irrevocably to the establishment and maintenance of the Debt Service Fund hereinafter created. The Bonds are additionally secured as provided in the Collateral Assignment. Section 7. DEBT SERVICE FUND. (a) Establishment of Debt Service Fund. A separate and special trust and to be designated and known as the "Debt Service Fund" shall be established by the Corporation with the Trustee for the benefit of the holders of the Bonds pursuant to the Agreement and the Trust Indenture , and maintained as provided in this Bond Resolution and the Trust Indenture, as long as any of the Bonds , or interest thereon, is outstanding and unpaid. (b) Accrued Interest. Immediately after the delivery of the Bonds to the Purchaser thereof, all accrued interest, if any, received from the proceeds from the sale and delivery of the Bonds , shall be transferred by the Trustee into the Debt Service Fund. (c) Installment Loan Payments. Pursuant to the Agreement and the Trust Indenture, the Owner shall make or pay, or cause to be made or paid, to the Trustee, which shall deposit into the Debt Service Fund, Installment Loan Payments as follows: (1) On or before each interest payment date as provided in Section 5 hereof, an amount which, together with any other amounts then on deposit therein and available for such purposes , will be sufficient to pay the interest coming due on the Bonds on each interest payment date; and (2) On or before each principal payment date as provided in Section 5 hereof, an amount which, together with any other amounts then on deposit therein and available for such purpose, will be sufficient to pay the principal of the Bonds scheduled to be paid on each principal payment date; and -24- (3) On or before any optional or mandatory prepayment or redemption date as permitted or required in Section 5 hereof, an amount which, together with any other amounts then on deposit and available for such purpose, will be sufficient to pay the prepayment or redemption ..price (including any agreed liquidated damages) specified therein; and (4) Promptly after the occurrence of a Taxable Event and a Final Determination of Taxability, the additional amount required to pay the agreed liquidated damages to the holders of the Bonds for any installments of principal which were unpaid on the date of any Taxable Event, but which were paid or redeemed prior to the prepayment or redemption of all unpaid principal installments after a Final Determination of Taxability, all as provided in Section 5 hereof; and (5) On any date on which the Bonds are declared to be immediately due and payable pursuant to the Trust Indenture, an amount which, together with any other amounts then on deposit and available for such purpose, will be sufficient to pay the principal of all Bonds then outstanding and the interest accrued thereon to such date and Redemption Premium, liquidated damages , if applicable, and the reasonable fees and expenses (including attorneys ' fees) of the Trustee in enforcing the Agreement; and (6) Promptly after receipt of each statement and request for payment, an amount equal to the charges of the Trustee for performing the duties of Trustee and Registrar, and the charges of the Paying Agent for the Bonds , as designated in Section 5 hereof, for paying or redeeming principal installments of the Bonds , and paying the interest thereon. In the event the Owner should fail to make, or cause to be made, any of the required Installment Loan Payments set forth in this Section, each such required payment shall continue as an obligation of the Owner until fully paid, and the Owner agrees to pay the same to the Trustee, for the benefit of the holders of the Bonds , with interest thereon, to the extent legally permissible, at the rate of 15% per annum, from the date any such payment was due until payment thereof. -25- N (d) Redemption. The Bonds initially authorized hereby shall be subject to redemption, and may or shall be redeemed (or purchased in lieu of redemption) as specified in Section 5 hereof. (e) Pa ments from Debt Service. Fund. Except as otherwise specifically provided in t is Bond Resolution or the Trust Indenture, the Debt Service Fund shall be used by the Trustee only to pay the principal of, prepayment or redemption premium, if any, agreed liquidated damages , if any, and interest on the Bonds , when due, and the charges of the Trustee , Registrar, and Paying Agent; and the Trustee shall make available to the Paying Agent, out of the Debt Service Fund, the amounts required to pay or redeem the principal of and interest on the Bonds when due, and the Trustee shall make all other payments as required by this Initial Bond Resolution and the Trust Indenture. (f) Immediately Available Funds. The Owner shall make all Installment Loan Payments in tunds that will be immediately available and allow the Paying Agent to pay, in lawful money of the United States of America, the principal, interest, and other amounts with respect to the Bonds , when due. (g) Investment of Funds. Any money held as part of the Debt Service Fund shall be invested or reinvested by the Trustee solely in certificates of deposit of banks approved by the Trustee , including certificates of deposit of the Trustee, or in any other similar securities of other federally insured depositories acceptable to the Trustee, or in any other investments approved by the Trustee. The Trustee shall make no investments except as specifically directed by the Approving Officer. The investments of the Debt Service Fund shall be deemed to be a part of such Fund, and, for the purpose of determining the amount of money in such Fund, such investments shall be valued at their cost or market value, whichever is lower. The income and profits , including realized discount on obligations purchased, received from such investments shall be deposited in or credited to the Debt Service Fund, and any losses on investments thereon shall be charged against the Debt Service Fund. If at any time it shall become necessary that some or all of the investments made with the moneys from the Debt Service Fund be redeemed or sold to raise moneys necessary to comply with the provisions of this Bond Resolution or the Trust Indenture , the Trustee shall, without further authorization, effect such redemption or sale, employing, in the case of a sale, any commercially reasonable method of effecting the same. The Trustee shall -26- not be liable or responsible for any loss resulting from any such investment or resulting from the redemption or sale of any such investment as herein authorized, except that the Trustee shall be liable for (1) any loss resulting from its willful or negligent failure , within a reasonable time after receiving the written direction from the Approving Officer , to make, redeem, or sell any investment in the manner provided for herein, and (2) except for any redemption or sale made pursuant to the next preceding sentence of this paragraph, for any loss resulting from the making, redeeming, or selling of any investment which was not authorized by written direction of the Approving Officer. If the Trustee is unable , after reasonable effort and within a reasonable time, to make, redeem, or sell any such investment, it shall so notify in writing the Approving Officer and thereafter the Trustee shall be relieved of all responsibility with respect thereto. In the event of any such loss , the Owner shall make additional deposits to restore same if and to the extent required to enable the Trustee to make all payments required to be made from the Debt Service Fund, and such additional deposits shall constitute additional amounts of "Installment Loan Payments". Section 8. SECURITY FOR FUNDS. All uninvested money in all Funds established pursuant to this Bond Resolution (including the Debt Service Fund and the Construction Fund) shall be secured by the Trustee in such manner and to the extent as may be directed by the Approving Officer and approved by the Trustee. Section 9. THE OWNER' S PAYMENTS. (a) Nature of Owner' s Obligation. The Owner has cove- nanted in the Agreement and the Trust Indenture, and, by the approval of this Bond Resolution, the Owner further has obligated itself and agreed on a limited recourse basis , regardless of and notwithstanding any provisions of the Agreement (other than Sections 6 . 01 and 6 .02 thereof relat- ing to merger , consolidation, transfer of assets , and assignment) and regardless of the provisions of any other agreement or contract to the contrary, to make or pay or cause to be made or paid, without set-off, recoupment, or counterclaim, but on a limited recourse basis only, the Installment Loan Payments to the Trustee in the amounts required by Section 7 (c) of this Bond Resolution to be made into the Debt Service Fund, and to make such payments on or before the dates specified in this Bond Resolution and the Trust Indenture; and said payments by the Owner shall be and -27- constitute the Installment Loan Payments as contemplated and required by the Agreement. Each Bondholder is and shall be entitled to rely unconditionally on the agreements , covenants , and representations set forth in this Bond Resolution and the Trust Indenture. (b) Prepayments . It is further understood that the Owner may prepay all or any part of each Installment Loan Payment , and any such prepayment, and any earnings thereon, shall be applied by the Trustee to the payment of each Installment Loan Payment; provided that the prepayment or redemption at any time of any unpaid principal installments of the Bonds prior to their due dates , with funds from any source (whether from Installment Loan Payments or otherwise) , shall not relieve the Owner of its obligation to make or pay, or cause to be made or paid, each Installment Loan Payment as specified in Section 9(a) above, when due with respect to any remaining unpaid principal installments of the Bonds . Section 10 . ADDITIONAL PARITY BONDS. (a) Additional Bonds . The Corporation reserves the right , upon the request of the Owner but only with the consent of the holders of Pt least 75% in aggregate principal amount of the Bonds and any Additional Bonds (as hereinafter defined) then outstanding, to issue additional parity revenue bonds ("Additional Bonds") in any amounts , for any lawful purpose or purposes , including the refunding of any outstanding Bonds . Such Additional Bonds , along with the Bonds authorized by this Bond Resolution, shall be considered, constitute, and be "Bonds" as defined in, and for all purposes of, the Agreement and the Trust Indenture. When issued and delivered, such Additional Bonds , the redemption premium, if any, agreed liquidated damages , if any, and the interest thereon shall be payable from the Debt Service Fund, and shall be payable from and secured by a first lien on and pledge of Installment Loan Payments pursuant to the Agreement, and secured by the Trust Indenture and the Collateral Assignment in the same manner and to the same extent as , and be on a parity with, all then outstanding Bonds and Additional Bonds . Such Additional Bonds may be issued in one or more series or issues , in various principal amounts , maturing at different times , bearing interest at different rates , be payable in installments or otherwise be redeemable prior to maturity, with or without redemption premium, on whatever terms or prices , and may contain such other provisions as may be provided in any Bond Resolution authorizing the issuance of -28- constitute the Installment Loan Payments as contemplated and required by the Agreement. Each Bondholder is and shall be entitled to rely unconditionally on the agreements , covenants , and representations set forth in this Bond Resolution and the Trust Indenture. (b) Prepayments . It is further understood that the Owner may prepay arl or any part of each Installment Loan Payment , and any such prepayment , and any earnings thereon, shall be applied by the Trustee to the payment of each Installment Loan Payment; provided that the prepayment or redemption at any time of any unpaid principal installments of the Bonds prior to their due dates , with funds from any source (whether from Installment Loan Payments or otherwise) , shall not relieve the Owner of its obligation to make or pay, or cause to be made or paid, each Installment Loan Payment as specified in Section 9(a) above, when due with respect to any remaining unpaid principal installments of the Bonds . Section 10 . ADDITIONAL PARITY BONDS. (a) Additional Bonds . The Corporation reserves the right , upon the request of the Owner but only with the consent of the holders of at least 75% in aggregate principal amount of the Bonds and any Additional Bonds (as hereinafter defined) then outstanding, to issue additional parity revenue bonds ("Additional Bonds") in any amounts , for any lawful purpose or purposes, including the refunding of any outstanding Bonds . Such Additional Bonds , along with the Bonds authorized by this Bond Resolution, shall be considered, constitute, and be "Bonds" as defined in, and for all purposes of, the Agreement and the Trust Indenture. When issued and delivered, such Additional Bonds , the redemption premium, if any, agreed liquidated damages , if any, and the interest thereon shall be payable from the Debt Service Fund, and shall be payable from and secured by a first lien on and pledge of Installment Loan Payments pursuant to the Agreement , and secured by the Trust Indenture and the Collateral Assignment in the same manner and to the same extent as , and be on a parity with, all then outstanding Bonds and Additional Bonds . Such Additional Bonds may be issued in one or more series or issues , in various principal amounts , maturing at different times , bearing interest at different rates , be payable in installments or otherwise be redeemable prior to maturity, with or without redemption premium, on whatever terms or prices , and may contain such other provisions as may be provided in any Bond Resolution authorizing the issuance of -28- such Additional Bonds . It is provided, however, that no series or issue of Additional Bonds shall be issued unless : (i) In the opinion of Bond Counsel (A) the issu- ance of such Additional Bonds will not adversely affect the exemption from federal income taxation of the interest on the then outstanding Bonds and Additional Bonds , or affect the validity of the then outstanding Bonds or Additional Bonds and (B) such Addi-tional Bonds are secured in the same manner and to the same extent as and are on a parity with all then outstanding Bonds and Additional Bonds ; (ii) A certificate is executed by the President or any Vice President and the Secretary of the Corporation to the effect that no default exists in connection with the Bonds or the Trust Indenture (or any amendment or supplement thereto) or with any of the covenants or requirements of this Bond Resolution or the Bond Resolutions (or any amendments or supplements thereto) authorizing the issuance of all then outstanding Bonds and Additional Bonds , and that the Debt Service Fund contains the amount then required to be on deposit therein; (iii) The Bond Resolution authorizing the issuance of such series or issue of Additional Bonds provides for additional Installment Loan Payments to be deposited into the Debt Service Fund in amounts sufficient to pay all principal of, redemption premium, if any, agreed liquidated damages , if any, and interest on such Additional Bonds , together with all Trustee, Registrar, and Paying Agent fees and expenses attributable to such Additional Bonds; (iv) The Approving Officer and the Trustee, but only with the consent of the holders of at least seventy five percent (75%) of the then outstanding principal amount of the Bonds and Additional Bonds , if any, approve in writing the Bond Resolution authorizing the issuance of such series or issue of Additional Bonds , as required by the Agreement; and (v) The Trustee, the Paying Agent, and principal and interest payment dates during any year in which principal and interest on such Additional Bonds are scheduled to be paid, are the same for the Additional Bonds .and the Bonds. -29- (b) Amendments to Trust Indenture Unnecessar . It shall not e necessary or required that t e Trust Indenture be amended or supplemented to cause any series or issue of Additional Bonds to be secured by the Trust Indenture. All that shall be necessary or required to cause any such Addi- tional Bonds to be secured by the Trust Indenture is for the Corporation to deliver to the Trustee a certified copy of the Bond Resolution authorizing their issuance prior to the delivery of such Additional Bonds . Section 11. SPECIAL COVENANTS. The Corporation fur- ther covenants as follows : (a) Installment Loan Payments Pled ed to Bonds Only. Other than or the payment of the Bonds and except as provided in this Bond Resolution, the Trust Indenture and the Collateral Assignment, the Installment Loan Payments , the Deed of Trust and the Note have not in any manner been pledged to the payment of any debt or obligation of the Corporation. (b) Non-Encumbrance. While any of the Bonds are outstanding, the Corporation will not (except with respect to the Bonds and any Additional Bonds and except as provided in the Agreement, any Bond Resolution, or the Trust Indenture) in any manner whatsoever create , assume , or suffer to exist , directly or indirectly, any mortgage, lien, encumbrance, pledge, or charge against the Debt Service Fund, the Installment Loan. Payments , the Construction Fund, the Deed of Trust, the Note, or any property or moneys deposited with the Trustee. (c) Performance by Corporation. The Corporation will carry out all of its covenants and obligations under this Bond Resolution; and the Corporation may be required to carry out such covenants and obligations by all legal and equitable means , including, but without limitation, actions for specific performance and the use and filing of mandamus proceedings in any court of competent jurisdiction against the Corporation. (d) Certain Modifications Prohibited. The Corporation covenants and agrees that it will not execute or permit the execution of any contract or agreement, or terminate or amend the Agreement or the Regulatory Agreement, in any manner that would relieve or abrogate the obligations of the Owner to make or pay, or cause to be made or paid, when due, all Installment Loan Payments , in the manner and to the extent required by the Agreement, this Bond Resolution, and -30- the Trust Indenture , or which would change or affect Sections 4 . 04 , 4 . 05 , 4 . 06 , 6. 01 and 6. 02 of the Agreement or any section of the Regulatory Agreement without the written consent of all of the Bondholders and the Trustee. Section 12 . THE BONDS ARE SPECIAL OBLIGATIONS . The Bonds and any coupons appertaining thereto are limited obligations of the Corporation and shall be payable solely out of the revenues derived from or in connection with the Agreement , including all sums deposited from time to time pursuant to the Agreement, the Trust Indenture and the Note in the Debt Service Fund established under the Trust Indenture, and in certain events out of amounts attributable to Bond proceeds or amounts secured through exercise of the remedies provided in the Trust Indenture, or in the Deed of Trust , or in the Collateral Assignment upon occurrence of an event of default thereunder, and do not constitute an indebtedness or an obligation (legal , general , special , moral or otherwise) of the City of Beaumont, Texas (or any other city, county or other municipal or political corporation or subdivision of the State of Texas) or of the State of Texas , or a loan of credit of any of them within the meaning of any constitutional or statutory provisions. Neither the State of Texas nor the City of Beaumont, Texas , nor any political corporation, subdivision or agency of the State of Texas shall be obligated to pay the principal of or premium, if any, or liquidated damages , if any, or interest on the Bonds and neither the faith and credit nor the taxing power of the State of Texas , the City of Beaumont, Texas , or any other political corporation, subdivision or agency of the State of Texas is pledged to the payment of the principal of or interest on the Bonds. No recourse under this Bond shall be had against any past, present or future officer, director, agent , employee or representative of the Corporation or of the City of Beaumont, Texas. The Bonds shall never be paid in whole or in part out of any funds raised or to be raised by taxation or out of any other revenues of the Corporation, the City of Beaumont, Texas , or the State of Texas except those revenues pledged by the Trust Indenture. Section 13. AMENDMENTS. (a) Amendment with Consent of Holders of 75% of the Bonds . Subject to approval in writing by the Corporation (with the consent of the Approving Officer of the Owner) , the holders of 75% in aggregate principal amount of the then outstanding Bonds shall have the right from time to time to approve any amendment to any Bond Resolution or to the Trust Indenture (provided that the Trustee must approve any -31- amendment to the Trust Indenture) which may be deemed necessary or desirable by the Corporation; provided, however, that nothing herein contained shall permit or be construed to permit the amendment , without the consent of the holder of each of the then outstanding Bonds affected thereby, of the terms and conditions. of any Bond Resolution, the Bonds , or the Trust Indenture, so as to : (1) change the Debt Service Fund requirements , interest payment dates , mandatory redemption provisions , or the due date or dates , or the maturity or maturities of the outstanding Bonds; (2) reduce the rate of interest borne by any of the outstanding Bonds; (3) reduce the terms of the principal of, redemption premium, if any, liquidated damages , if any, or interest on the outstanding Bonds , or impose any conditions with respect to such payments ; (4) modify the terms of payment of principal of, redemption premium, if any, liquidated damages , if any, or interest on the outstanding Bonds , or impose any conditions with respect to such payments ; (5) affect the rights of the holders of less than all of the Bonds then outstanding; (6) decrease the minimum percentage of the principal amount of Bonds necessary for consent to any such amendment; or (7) alter the obligations of the Owner to pay Install- went Loan Payments in the manner and to the extent provided in the Agreement, this Bond Resolution, and the Trust Indenture. (b) Notice of Amendment. If at any time the Corporation shall desire to amend any Bond Resolution or the Trust Indenture under this Section, the Corporation shall file a copy of the proposed amendment at the principal office of the Trustee and shall cause notice of the proposed amendment to be published at least once in a financial newspaper , journal or publication of general circulation in The County of New York, New York, or in the State of Texas , during each calendar week for at least two successive calendar weeks. If, because of temporary or permanent -32- suspension of the publication or general circulation of all such financial newspapers , journals and publications , it is impossible or impractical to publish such notice in the manner provided herein, then such publication in lieu thereof as shall be made by the Trustee shall constitute a sufficient publication of notice. Such notice shall briefly set forth the nature of the proposed amendment and shall state that a copy thereof is on file at the principal office of the Trustee for inspection by all owners of Bonds . Such publication is not required, however, if notice in writing is given to each holder of Bonds . (c) Consent to Amendment. Whenever at any time (but not less than 30 days nor more than one year from the date of the first publication of said notice or other service of written notice) the Corporation shall receive an instrument or instruments executed by the holders of at least 75% in aggregate principal amounts of all Bonds then outstanding, which instrument or instruments shall refer to the proposed amendment described in said notice and shall specifically consent to and approve such amendment, the Corporation may adopt the amendatory resolution in substantially the same form. (d) Effect of Amendment. Upon the adoption of any amendatory resolution pursuant to the provisions of this Section, the Bond Resolution or the Trust Indenture, shall be deemed to be amended in accordance with such amendatory resolution, and the respective rights , duties , and obligations of all the Bondholders under such amendatory resolution or the Trust Indenture shall thereafter be deter- mined and exercised subject in all respects to such amendments. (e) Consent of Bondholders . Any consent given by a Bondholder pursuant to the provisions of this Section shall be irrevocable for a period of 6 months from the date of the first publication or other giving of the notice provided for in this Section, and shall be conclusive and binding upon all future holders of the same Bond during such period. Such consent may be revoked at any time after 6 months from the date of the first publication or other giving of such notice by the Bondholder who gave such consent, or by a successor in title , by filing notice thereof with the Trustee and the Corporation, but such revocation shall not be effective if the holders of 757 in aggregate principal amount of the then outstanding Bonds have, prior to the attempted revocation, consented to and approved the amendment. -33- (f) Ownership of the Bonds . For the purpose of this Section, the fact of being a Bondholder, the amount and numbers of such Bonds , and the date of being a Bondholder may be conclusively presumed, or may be proved by an affidavit satisfactory to the Corporation and the Trustee of the person claiming to be such Bondholder, or by a certificate executed by any trust company, bank, banker, or any other depository wherever situated showing that at the date therein mentioned such person has on deposit with such trust company, bank, banker, or other depository, the Bonds described in such certificate, or in any other manner , whether or not the Bonds are so deposited, as the Trustee may approve. The Corporation may conclusively presume that the status of any Bondholders will continue until written notice to the contrary is served upon the Corporation. (g) Amendments Without Consent. Notwithstanding the provisions of (a) through (f) of this Section, and without publication of the proposed amendment and without the consent of the Bondholders , but subject to approval of the Approving Officer and, in the case of any amendment to the Trust Indenture , with the approval of the Trustee , the Corporation may, at any time, amend any Bond Resolution or the Trust Indenture to cure any ambiguity or cure, correct, or supplement any defective or inconsistent provision contained therein, or make any other change that does not in any respect materially and adversely affect the interest of the Bondholders , provided that no such amendment shall be made contrary to the proviso to Section 13 (a) above , and a duly certified or executed copy of each such amendment shall be filed with the Trustee. (h) Special Exception. The provisions of this Section 13 shall have no application to the right of the Corporation to amend its Rules and Regulations pertaining to levels of low and moderate income as set forth in Section 19 hereof, and the Corporation shall be permitted to make any such amendments as provided therein. Section 14 . ESTABLISHMENT OF CONSTRUCTION FUND. (a) Deposit of Bond Proceeds into Construction Fund. Prior to or immediately after the sale and delivery of the Bonds authorized hereby, the Corporation shall establish the Construction Fund with the Trustee, as defined in and required by the Agreement. The Corporation shall deposit all of the proceeds from the sale and delivery of the Bonds authorized hereby into the Construction Fund. The Trustee shall draw on and use the Construction Fund as hereinafter -34- provided. The amount so deposited into the Construction Fund shall constitute the Loan made to the Owner by the Corporation as contemplated and provided in the Agreement. (b) Investment of Money in Construction Fund. Any money held as part o't the Construction Fund, of er than the amounts described in Section 15 (a) , shall be invested or reinvested by the Trustee upon the written direction of the Approving Officer in certificates of deposit of banks approved by the Trustee , including certificates of deposit of the Trustee, or in any other similar securities of federally insured depositories acceptable to the Trustee, or in any other investment approved by the Trustee. The Trustee shall make no investments except as specifically directed in writing by the Approving Officer. The investments of the Construction Fund shall be deemed to be a part of the Construction Fund, and for the purpose of determining the amount of money in the Construction Fund, such investments shall be valued at their cost or market value , whichever is lower. The income and profits (including realized discount on obligations) received from such investments shall be deposited in or credited to the Construction Fund, and any losses on investments shall be charged against the Construction Fund. Upon the written direction of the Approving Officer, the Trustee shall redeem or sell all or any designated part of such investments employing, in the case of a sale, any commercially reasonable method of effecting the same. The Trustee shall not be liable or responsible for any loss resulting from the redemption or sale of any such investment as herein authorized; except that, notwithstanding any provisions of the Agreement, the Trustee shall be liable for (1) any loss resulting from its willful or negligent failure , within a reasonable time after receiving the written direction from the Approving Officer, to make, redeem, or sell any investment in the manner provided for herein, and (2) any loss resulting from the making, redeeming, or selling of any investment which was not authorized by written direction of the Approving Officer. It the Trustee is unable, after reasonable effort and within a reasonable time after receipt of the required written direction, to make, redeem, or sell any such investment , it shall so notify in writing the Approving Officer, and thereupon the Trustee shall be relieved of all liability or responsibility with respect thereto. (c) Deposit of .Accrued Interest, Income, and Profits . Any accrued interest received from the sale of the Bonds , and all income and profits received from the investment of the Construction Fund shall , as soon as practicable after -35- any receipt thereof has been deposited in or credited to the Construction Fund, be transferred by the Trustee and deposited into the Debt Service Fund to be used to pay interest on the Bonds during the period of construction of the Development. Section 15 . PAYMENTS FROM CONSTRUCTION FUND. (a) Corporation' s Administrative Overhead Expenses and Other Costs . Immediately after the de ivery of the Bonds authorized hereby, the Trustee shall pay directly to the Corporation the amount which is agreed upon by the Corporation and the Owner and which will reimburse the Corporation for its application fee and its administrative and overhead expenses directly attributable and chargeable to the costs of issuance of the Bonds authorized hereby. Also, immediately after the delivery of the Bonds authorized hereby, the Trustee shall pay directly out of the Construction Fund, promptly after receiving the bills or statements therefor, all of the actual expenses and costs of issuance of such Bonds , including, without limitation, financing charges , commitment fees , printing and engraving expenses , the fees and expenses of accountants , financial advisors , and attorneys , and the initial fees and expenses of the Trustee. (b) Reimbursement for and Payment of Cost of the Development. Subject and subordinate to making the payments required by the preceding paragraph, the Trustee shall make such payments from the Construction Fund to enable the Owner to pay, or to reimburse the Owner for paying, any Cost of the Development , from time to time upon receipt by the Trustee of a request of the Owner signed by the Approving Officer; provided that in no event shall the Trustee disburse from the Construction Fund more than 90% of the costs for which the Owner requests payment or reimbursement until at least 30 days after the Completion Date. Such request shall be accompanied by a certificate (in the form attached to the Agreement) stating with respect to each payment as follows: (i) the expenditures , in summary form, as to which payment is to be made or for which reimbursement is requested; (ii) that the amounts requested are to be or have been paid by the Owner for interest during construc- tion, acquisition and development of property, or to contractors , subcontractors , materialmen, engineers , -36- architects , or other persons who will perform or have performed necessary or appropriate services or will supply or have supplied necessary or appropriate materials for the provision, acquisition, construction, renovation, reconstruction, rehabilitation, repair, alteration, improvement or extension of the Develop- ment, as the case may be, and that, to the best of the knowledge of the person delivering the certificate, the fair value of such interest, property, services , or materials is not exceeded by the amounts requested to be paid; (iii) that no part of the several amounts requested to be paid to the Owner as stated in such certificate has been or is the basis for the payment of any money in any previous or then pending request from the Construction Fund or any other source; (iv) that the payment of the amounts requested will not result in a breach of any of the covenants of the Owner contained in the Agreement; and (v) that the expenditure of such amounts to be paid, when added to all previous disbursements from the Construction Fund, will result in -at least 927 of the total of such disbursements , other than disbursements for issuance expenses , being used to provide , acquire, construct, rehabilitate, renovate , improve, alter, equip , and furnish a project for residential rental property that constitutes an exempt facility (within the meaning of Section 103 (b) (4) (A) of the Code) . (c) Reliance by Trustee. The Trustee shall rely fully on any request and certificate delivered pursuant to this Section and shall not be required to make any investigation in connection therewith. The Trustee may request from time to time, and the Owner shall furnish, supporting documentation for any amounts requested under Section 15 (b) (ii) above. If amounts paid by the Trustee with respect to any portion of the Development should exceed the cost thereof, the Owner shall promptly repay such overpayment into the Construction Fund. Section 16. SURPLUS CONSTRUCTION FUNDS. (a) Disposition of Surplus Funds. The completion of the Development shall be conclusivelT evidenced, and the date of completion shall be established by a written certificate of completion to be signed and delivered as -37- provided in the Agreement. If, upon the completion of the Development, there shall be any surplus funds remaining in the Construction Fund not required to provide for the payment of the Cost of the Development, or if any funds are on hand in the Construction Fund at the time of the release of the Trust Indenture under the terms thereof, then any such funds shall be used immediately to prepay or redeem principal installments of the Bonds , in inverse chronological order, in the manner set forth in Section 5 hereof for the prepayment or redemption of principal installments of the Bonds with surplus Construction Fund moneys , to the extent of any such available funds; provided that prior to such use, the Corporation and the Trustee shall have been furnished with an unqualified opinion of Bond Counsel to the effect that the use of moneys from the Construction Fund for such purpose will be lawful and will not impair the exemption of interest on the Bonds from federal income taxation; and provided further that the Owner shall deposit into the Construction Fund prior to such prepayment or redemption an amount sufficient to cause the total amount in the Construction Fund to be equal to (i) an integral multiple of $1, 000 , or (ii) not less than all of the unpaid principal installment or installments to be prepaid or redeemed. (b) Disposition of Construction Fund u on Acceleration and Redemption. I the Trustee shall ec are the principa of the Bonds and the interest accrued thereon immediately due and payable as the result of an Event of Default specified in the Trust Indenture, or if the Bonds are optionally or mandatorily prepaid or redeemed prior to maturity as a whole in accordance with their terms , any amounts remaining in the Construction Fund shall be used immediately by the Trustee for the purpose of paying principal of, redemption premium, if any, agreed liquidated damages , if any, and interest on the Bonds when due. Section 17 . DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED BONDS. (a) Replacement Bonds. In the event any of the outstanding Bonds aut orized hereby are damaged, mutilated, lost, stolen, or destroyed, the Corporation shall execute, and the Trustee shall authenticate, a new Bond of the same principal amount and maturity of the damaged, mutilated, lost, stolen, or destroyed Bond in exchange and substitution for such Bond or in lieu of and substitution for such Bond. -38- (b) Application for Substitute Bonds . Application for exchange and substitution of damaged, mutilated, lost, stolen, or destroyed Bonds shall be made to the Corporation. In every case , the applicant for a substitute Bond shall furnish to the Corporation and to the Trustee such security or indemnity as may be required by them to save each of them and the Paying Agent harmless . In every case of loss , theft , or destruction of a Bond, the applicant shall also furnish to the Corporation and to the Trustee evidence to their satisfaction of the loss , theft, or destruction, and of the ownership of the lost Bond. In every case of damage or mutilation of a Bond, the applicant shall surrender the Bond so damaged or mutilated. (c) No Default Occurred. Notwithstanding the foregoing provisions of this Section, in the event any such Bond shall have matured, and no default has occurred which is then continuing in the payment of the principal of, redemption premium, if any, agreed liquidated damages , if any, or interest on the Bond, the Corporation may authorize the payment of the same (without surrender thereof except in the case of a damaged or mutilated Bond) instead of issuing a substitute Bond, provided security or indemnity is furnished as above provided in this Section. (d) Charge for Issuing- Substitute Bonds. Prior to the issuance o± any substitute Bond, t e Corporation and the Trustee may charge the applicant for such Bond with all legal , printing, and other expenses in connection therewith. Every substitute Bond issued pursuant to the provisions of this Section by virtue of the fact that any Bond is lost, stolen, or destroyed shall constitute a contractual obligation of the Corporation whether or not the lost, stolen, or destroyed Bond shall be found at any time, or be enforceable by anyone , and shall be entitled to all the benefits of the Trust Indenture and this Bond Resolution equally and proportionately with any and all other Bonds duly issued under this Bond Resolution. (e) Authority for Issuing Substitute Bonds . This Bond Resolution shall constitute sufficient authority for the issuance of any such substitute bonds without necessity of further action by the Board of Directors of the Corporation or any other body or person, and the issuance of such substituted Bonds is hereby authorized, notwithstanding any other provisions of this Bond Resolution, except to the extent otherwise required by law. -39- Section 18 . NO ARBITRAGE. The Corporation and the Owner have covenanted to and with the purchasers of the Bonds that they will make no use of the direct or indirect proceeds thereof at any time throughout the term thereof which would cause the Bonds to be arbitrage bonds within the meaning of Section 103 (c) of the Code or any Regulations or rulings pertaining thereto ; and by this covenant the Corporation and the Owner are obligated to comply with the requirements of the aforesaid Section 103 (c) and all applicable and pertinent Regulations and rulings relating to arbitrage bonds . Section 19. ADOPTION OF RULES AND REGULATIONS AS TO LOW AND MODERATE INCOME LEVELS. Pursuant to an as require y the Act, the Board of Directors of the Corporation hereby finds and determines and hereby adopts as a part of the Rules and Regulations of the Corporation effective as of January 1 , 1984 , that for purposes of occupancy of dwelling units in the Development, a person of low and moderate income shall be a person whose adjusted gross income, together with the adjusted gross incomes of all persons who intend to reside with such person in one dwelling unit within the Development, did not exceed $ for the calendar year 1983. It is expressly stipu at that (i) the Corporation shall retain the right to modify the levels of low and moderate income for purposes of the Act and this resolution at any time and from time to time while any of the Bonds may be outstanding without the consent of any other person or entity (including without limitation the Trustee , the Owner or any Bondholder) , and (ii) the income levels now or hereafter established by the Corporation as provided in this Section have been or will be determined solely for purposes of compliance with the Act, and nothing contained herein shall affect the Owner's obligation to rent dwelling units in the Development to individuals of low or moderate income as defined in the Code and the Regulations and rulings thereunder in order to qualify (and maintain qualification of) the Bonds as tax-exempt bonds under Section 103 (b) (4) (A) of the Code. THIS RESOLUTION PASSED and APPROVED this day of October, 1984 . -40-