06-0501_MILLENNIUM HOUSING CORPORATION_Administration and Oversight AgreementADMINISTRATION AND OVERSIGHT AGREEMENT
by and among
INDEPENDENT CITIES LEASE FINANCE AUTHORITY
and
WOLF & COMPANY INC.,
as Oversight Agent
and
MILLENNIUM HOUSING OF CALIFORNIA,
as Borrower
and
CITY OF SAN JUAN CAPISTRANO
Dated as of May 1, 2006
Relating to:
$29,660,000
Independent Cities Lease Finance Authority
Mobile Home Park Revenue Bonds
(San Juan Mobile Estates)
Series 2006A
and
$9,765,000
Independent Cities Lease Finance Authority
Mobile Home Park Subordinate Revenue Bonds
(San Juan Mobile Estates)
Series 2006B
and
$485,000
Independent Cities Lease Finance Authority
Mobile Home Park Subordinate Revenue Bonds
(San Juan Mobile Estates)
Taxable Series 2006C
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ADMINISTRATION AND OVERSIGHT AGREEMENT
THIS ADMINISTRATION AND OVERSIGHT AGREEMENT (the "Administration
Agreement') is made and entered into as of May 1, 2006, by and among the INDEPENDENT
CITIES LEASE FINANCE AUTHORITY a joint powers authority duly organized and existing
under the laws of the State of California (the "Authority"), the CITY OF SAN JUAN
CAPISTRANO, a public body corporate and politic duly organized and existing under the laws
of the State of California (the "City"), MILLENNIUM HOUSING CORPORATION, a
California nonprofit public benefit corporation (the "Borrower"), and WOLF & COMPANY
INC. (the "Oversight Agent').
RECITALS:
WHEREAS, to assist the Borrower in its acquisition of the San Juan Mobile Estates
mobile home park located in the City of San Juan Capistrano (which is an associate member of
the Authority) (the "Project'), the Authority has issued its Mobile Home Park Revenue Bonds
(San Juan Mobile Estates) Series 2006A and its Mobile Home Park Subordinate Revenue Bonds
(San Juan Mobile Estates) Series 2006B and its Mobile Home Park Subordinate Revenue Bonds
(San Juan Mobile Estates) Taxable Series 2006C (collectively, the "Bonds") pursuant to an
Indenture of Trust, dated as of May 1, 2006 (the "Indenture"), by and between the Authority and
Union Bank of California, N.A., as Trustee thereunder (the "Trustee"); and
WHEREAS, the Authority has made a loan (the "Loan") of the proceeds of the Bonds to
the Borrower, as provided in the Loan Agreement, dated as of May 1, 2006 (the "Loan
Agreement'), by and among the Authority, the Borrower and the Trustee, which agreement
provides for certain oversight provisions relating to the management of the Project; and
WHEREAS, the Authority has entered into a Regulatory Agreement and Declaration of
Restrictive Covenants, dated as of May 1, 2006 (the "Regulatory Agreement') with the Trustee
and the Borrower, which agreement, among other things, sets forth certain restrictions applicable
to the property being financed with the proceeds of the Loan, which restrictions are intended to
assure continued compliance with the provisions of the Internal Revenue Code of 1986, as
amended (the "Code"); and
WHEREAS, the Authority desires to appoint Wolf & Company, Inc., as Oversight Agent
under the Regulatory Agreement to monitor the income levels of the residents of the Qualified
Spaces (as defined in the Regulatory Agreement) and as Oversight Agent under the Loan
Agreement to carry out the duties of the Oversight Agent set forth in the Loan Agreement; and
WHEREAS, the City and the Borrower have entered into a Supplemental Regulatory
Agreement and Declaration of Restrictive Covenants dated as of May 1, 2006 (the
"Supplemental Regulatory Agreement") which provides, among other things, for certain
additional affordability restrictions on the Project applicable to Qualified Residents and
Qualified Spaces; and
WHEREAS, the City desires that the Oversight Agent monitor the income levels of the
residents of the Qualified Spaces for purposes of the Supplemental Regulatory Agreement; and
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WHEREAS, Wolf & Company, Inc., represents that it has the necessary experience and
expertise required to evaluate whether the Project complies with the requirements set forth in the
Loan Agreement, the Regulatory Agreement and the Supplemental Regulatory Agreement.
NOW, THEREFORE, in consideration of the premises and respective representations and
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
1.1. Definitions of Terms. All capitalized terms used in this Administration
Agreement and not otherwise defined herein shall have the respective meanings given to them in
the Indenture and/or the Regulatory Agreement and/or the Supplemental Regulatory Agreement.
1.2. Article and Section Headings. The heading or titles of the several articles and
sections hereof shall be solely for the convenience of reference and shall not affect the meaning,
construction or effect of the provisions hereof.
1.3. Interpretation. The singular form of any word used herein, including terms
defined in the Indenture and/or the Regulatory Agreement, shall include the plural and vice
versa, if applicable. The use of a word of any gender shall include all genders, if applicable.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1. Representations of the Authority. The Authority makes the following
representations:
(a) It is a joint powers authority, duly organized and existing under the Constitution
and laws of the State of California.
(b) It has the power to enter into the transactions contemplated by this Administration
Agreement and to carry out its obligations hereunder and to consummate all other transactions on
its part contemplated herein; and it has duly authorized the execution and delivery of this
Administration Agreement.
(c) The City of San Juan Capistrano is an associate member of the Authority.
2.2. Representations and Warranties of the Borrower. The Borrower makes the
following representations and warranties:
(a) It has power and authority to own its properties and carry on its business as now
being conducted, and is duly qualified to do such business wherever such qualification is
required, including the State of California.
(b) It has the power to execute and deliver this Administration Agreement and to
carry out the transactions on its part contemplated hereby; and it has duly authorized the
execution, delivery and performance of this Administration Agreement.
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(c) The Oversight Agent is independent from and not under the control of the
Borrower, does not have any substantial interest, direct or indirect, in the Borrower, and is not an
officer or employee of the Borrower.
2.3. Representations and Warranties of the Oversight Agent. The Oversight Agent
makes the following representations and warranties:
(a) It is a corporation duly organized, validly existing and in good standing under the
laws of the State of California and has the power and authority to cant' on its business as now
being conducted.
(b) It has the power to execute and deliver this Administration Agreement and to
carry out the transactions on its part contemplated hereby; and it has duly authorized the
execution, delivery and performance of this Administration Agreement.
(c) It is independent from and not under the control of the Borrower, does not have
any substantial interest, direct or indirect, in the Borrower, and is not an officer or employee of
the Borrower.
(d) It has received copies of the Indenture, the Loan Agreement, the Regulatory
Agreement and the Supplemental Regulatory Agreement, and it is familiar with the terms and
conditions thereof as the same relate to the Code and the Act.
ARTICLE III
DUTIES AND COMPENSATION OF THE OVERSIGHT AGENT
3.1. Duties of Oversight Agent. Wolf & Company, Inc., is the initial Oversight Agent
hereunder. This Section 3.1 applies to Wolf & Company, Inc., as Oversight Agent and to any
successor Oversight Agent. In its capacity as Oversight Agent hereunder, for and on behalf of
the Authority, the Oversight Agent will perform the following duties in a careful and timely
manner, to the highest standards of its profession:
(a) It will be familiar with and will give written notice to the Authority, the City, the
Trustee and the Borrower within ten days of the publication by the Department of Housing and
Urban Development of any change in:
(i) The Median Income for the Area; and
(ii) The maximum income at which households consisting of various numbers
of persons may be determined to be Qualified Residents under the terms of the
Regulatory Agreement and the Supplemental Regulatory Agreement; and
(iii) The maximum allowable rents under each applicable provision of Section
4 of the Regulatory Agreement and Section 4 of the Supplemental Regulatory
Agreement; and
(iv) The maximum income at which households consisting of various numbers
of persons may be determined to be Very Low Income Residents or Lower Income
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Residents, under the terms of the Regulatory Agreement and the Supplemental
Regulatory Agreement.
(b) Promptly following its receipt thereof, it will review the Income Certifications,
Certificates of Continuing Program Compliance, and all other reports and certificates furnished
to it pursuant to the Regulatory Agreement and the Supplemental Regulatory Agreement in order
to determine that each such document is complete and to verify the internal accuracy of the
calculations, and conclusions with respect to such calculations, set forth therein, including the
conclusion that the Qualified Spaces have been rented as specified by the terms of the
Regulatory Agreement and the Supplemental Regulatory Agreement; and it will maintain such
documents on file and open to the inspection by the Authority, the City, the Trustee and the
Borrower during the term of the Regulatory Agreement and the Supplemental Regulatory
Agreement.
(c) Promptly upon receipt, it will review the form of application and lease with
respect to the Qualified Spaces to verify compliance with the provisions of the Regulatory
Agreement and the Supplemental Regulatory Agreement.
(d) Promptly upon determining that any report or certificate submitted to it pursuant
to the Regulatory Agreement and the Supplemental Regulatory Agreement is inaccurate or
incomplete the Oversight Agent shall:
(i) If the inaccuracy or lack of completeness does not cause the Project to
cease to meet the qualifications set forth in Section 3 or 4 of the Regulatory Agreement,
give notice of such inaccuracy or lack of completeness to the Borrower and direct the
Borrower to correct or complete the same, as the case may be, within a 30 -day period,
subject to extension in the sole discretion of the Oversight Agent;
(ii) If the inaccuracy or lack of completeness is not corrected within thirty (30)
days or if the inaccuracy or lack of completeness causes the Project to cease to meet the
qualification set forth in Section 3 or 4 of the Regulatory Agreement immediately give
written notice of said fact to the Authority, the Trustee and the Borrower; and
(iii) If the inaccuracy or lack of completeness does not cause the Project to
meet the requirements of Section 4 of the Supplemental Regulatory Agreement, give
notice of such inaccuracy or lack of completeness to the Borrower and the City and direct
the Borrower to correct and complete the same, as the case may be, within a 30 -day
period, subject to extension in the sole discretion of the Oversight Agent.
(e) (i) In the event that the Borrower fails to file with the Oversight Agent any report,
certification (including, in particular, the certification to the Secretary of the Treasury required
by Section 4(e) of the Regulatory Agreement) or other document required pursuant to the
Regulatory Agreement within the time set forth in the Regulatory Agreement as applicable, the
Oversight Agent shall immediately give written notice of that fact to the Authority, the Trustee,
the City and the Borrower.
(ii) In the event that the Borrower fails to file with the Oversight Agent any
report, certification or other document required pursuant to the Supplemental Regulatory
RVPUB\FBAUM\709452.1 4
Agreement within the time set forth in the Supplemental Regulatory Agreement, as
applicable, the Oversight Agent shall immediately give written notice of that fact to the
City and the Borrower.
(f) On behalf of the Authority and the City, the Oversight Agent shall, at least
annually and whenever requested by the Authority or the City, audit the survey of the tenants of
the Qualified Spaces with respect to income levels, household sizes and such other information
as the Authority may specify, and all as further required under Section 4 of the Regulatory
Agreement and Section 4 of the Supplemental Regulatory Agreement. Based on such
information, the Authority shall determine compliance with the affordability requirements under
the Act, the Code and the Supplemental Regulatory Agreement. In the event of any
noncompliance the Oversight Agent shall notify the Authority and the City as to the nature and
extent of the noncompliance and the Oversight Agent shall suggest alternatives for bringing the
Qualified Spaces into compliance.
(g) The Oversight Agent will perform on a timely basis all duties ascribed to the
Oversight Agent in the Indenture, the Loan Agreement, the Regulatory Agreement and the
Supplemental Regulatory Agreement, including without limitation the following: (i) annual
review of the Borrower's financial statements, (ii) review the coverage calculation for release of
surplus cashflow and report comments to the Borrower, the Authority and the City, (iii) review
the final budget and forward comments to the Borrower, the Authority, (iv) physical inspection
of the Project on a quarterly basis, including examination of the infrastructure, the clubhouse,
and any other common areas, and (v) monthly confirmation report to the Authority, the City and
any Bondholder requesting such information that the Trustee has received the monthly deposit in
accordance with the approved budget and, in the event that the Trustee has not, to take such
further steps as required by the Loan Agreement.
3.3. Compensation. For its services as the Oversight Agent, Wolf & Company, Inc.
shall be paid $6,000 at Bond Closing, and thereafter an annual fee of $6,000 payable by the
Borrower in equal quarterly installments commencing May 15, 2007, as set forth in the
Indenture. The fee of the Oversight Agent shall be paid to the Oversight Agent by the Trustee
upon receipt by the Trustee of an invoice from the Oversight Agent. If the Oversight Agent
provides services outside the scope of this Agreement, as requested in writing by the Authority,
the compensation shall be paid at the then prevailing fee schedule of the Oversight Agent.
ARTICLE IV
TERM
4.1. Term of Agreement. Unless sooner terminated pursuant to the provisions of
Sections 4.2 and 4.3 hereof, this Administration Agreement shall remain in full force and effect
for the term of the Regulatory Agreement.
4.2. Termination. At its sole discretion, the Authority may terminate this
Administration Agreement upon giving the Oversight Agent and the Borrower thirty (30) days
written notice of its intention to do so. This Administration Agreement may be terminated in
whole or in part only as to the services described in Section 3. 1, whereupon a partial fee for the
RVPUB\FBAUM\709452.1 5
services not terminated will be agreed upon by the parties and memorialized in an amendment
hereto.
4.3. Resignation of Oversight Agent. With the written consent of the Authority, the
Oversight Agent may resign from its position and terminate this Administration Agreement by
giving the other parties hereto thirty (30) days written notice of its intention to do so.
4.4 Termination With Respect to Supplemental Regulatory Agreement. At its sole
discretion, the City may terminate this Administration Agreement with respect to the
Supplemental Regulatory Agreement upon giving the Oversight Agent and the Borrower thirty
(30) days written notice of its intention to do so.
ARTICLE V
MISCELLANEOUS PROVISIONS
5.1. Execution in Counterparts. This Administration Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original, and such
counterparts shall constitute but one and the same instrument.
5.2. Business Days. If any action is required to be taken hereunder on a date which
falls on other than a Business Day, such action shall be taken on the next succeeding Business
Day.
5.3. Governing Law. This Administration Agreement shall be construed in
accordance with the laws of the State of California and the obligations, rights and remedies of
the parties hereunder shall be determined in accordance with such laws.
5.4. Notices. All notices, certificates or other communications hereunder shall be
sufficiently given and shall be deemed given when delivered or mailed by registered mail,
postage prepaid, addressed to the appropriate Notice Address set forth in the Regulatory
Agreement and the Supplemental Regulatory Agreement. The Notice Address of the Oversight
Agent is: Wolf & Company Inc., 5 Pembroke Lane, Laguna Niguel, California 92677, Attention:
Wesley R. Wolf.
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IN WITNESS WHEREOF, the parties hereto have caused this Administration Agreement
to be executed on their behalf by their duly authorized representatives, all as of the date
hereinabove written.
INDEPENDENT CITIES LEASE FINANCE
AUTHORITY
CITY OF SAN JUAN CAPISTRANO
0
City Manager
MILLENNIUM HOUSING CORPORATION,
a California nonprofit public benefit corporation
Fro,
WOLF & COMPANY INC., as Oversight Agent
By-
utl o 'zed Signatory
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WOLF & COMPANY INC., as Oversight Agent
By-
utl o 'zed Signatory
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IN WITNESS WHEREOF, the parties hereto have caused this Administration Agreement
to be executed on their behalf by their duly authorized representatives, all as of the date
hereinabove written.
INDEPENDENT CITIES LEASE FINANCE
AUTHORITY
President
CITY OF SAN JUAN CAPISTRANO
By: --T— 011f�
City Manager
MILLENNIUM HOUSING CORPORATION,
a California nonprofit public benefit corporation
L -n
President
WOLF & COMPANY INC., as Oversight Agent
M
Authorized Signatory
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PUBLIC AGENCY FORM OF ACKNOWLEDGEMENT
State of California )
County of Orange ) ss.
City of San Juan Capistrano )
(Gov't Code 40814 & Civil Code 118 1)
On May 25, 2006 before me, Margaret R. Monahan, City Clerk, personally appeared
David F. Adams, City Manager, personally known to me to be the person whose name is subscribed
to the within instrument and acknowledged to me that she executed the same in her authorized
capacity, and that by her signature on the instrument the person, or the entity upon behalf of which
the person acted, executed the instrument.
(SEAL)
Capacity Claimed by Signers
City Manager
Title
Signers are Representing
City of San Juan Capistrano
WITNESS my hand and official seal.
Monahan, City Clerk
OPTIONAL
Description of Attached Document
Admin & Oversight Agreement