HomeMy WebLinkAboutExhibit 2po opinion ent 6-4-10
SECTION 108 -GUARANTEED LOANS: MODEL LEGAL, OPINION
FOR SERIES 2010-A PUBLIC OFFERING [July 20101
[This model for use only by counsel to CDBG entitlement grantees
NOT using a designated public agency to issue the guaranteed
Note, and which are not participating in a CDBG States' Program
for nonentitlement areas]
[Please review instructions following opinion]
Secretary of Housing and Urban Development
451 7th Street, SW
Washington, DC 20410
Dear Sir or Madam:
The undersigned, being duly licensed and in good standing to
practice law in the State [Commonwealth] of
is legal counsel to the [City, County, etc.] of
("Borrower"). As such,. I [we] have represented
the Borrower regarding that certain promissory note, referred to
as Note No. [See , in the Aggregate Principal
Amount of $ instruction 5 below] ("Note"), to
be executed by the Borrower payable to the order of the
Registered Holder thereof, and to be guaranteed by the Secretary
of Housing and Urban Development ("HUD") under section 108 of the
Housing and Community Development Act of 1974, as amended, 42
U.S.C. 5308 ("Section 108"). The Note will be included in a
trust created by HUD (together with other Section 108 Notes
issued by other borrowers), and trust certificates based on the
trust will be sold in the Series 2010-A public offering by
underwriters selected by HUD. HUD's guarantee of the Note will
be governed by the Contract for Loan Guarantee Assistance under
Section 108 between the Borrower and HUD (the "Contract"), in
which the Borrower pledges Community Development Block Grants
pursuant to 24 CER 570.705(b)(2), as well as any other security
specified in the Contract, as security for HUD's guarantee.
In my jour] capacity as legal counsel, I [we] have made an
examination and investigation of all such matters of.fact and
questions of law as I [we] consider necessary or advisable to
enable me [us] to render the opinion hereafter set forth.
Specifically, and without _limiting the generality of the
foregoing, I [we] have examined:
1. [Cite applicable provisions of the Constitution and/or
Statutes of the State [Commonwealth]] [optional]
[Cite applicable provisions of Charter and Ordinances
of the Borrower] [optional]
3. A Resolution of the governing body of Borrower dated
authorizing Borrower to enter into
this transaction, and authorizing [Insert name or title
of official authorized to execute Note and Contract].
to execute on behalf of Borrower all documents
necessary or desirable to accomplish the transaction.
4. The Contract
5. The Note
6. The Amended and Restated Master Fiscal Agency Agreement
dated as of May 17, 2000, the Trust Agreement dated as
of January 1, 1995, and the form of Supplement to the
Trust Agreement to be executed by the Secretary of HUD
for the closing of the public offering.
Based on the foregoing investigation and authorities, I am
[we are] of the opinion that:
1. Borrower has authorized in accordance with [the cited]
[applicable] State and local law, the transaction, including
issuance of the Note, the pledge of grant funds, and the
execution of all documents necessary or desirable to accomplish
the transaction.
2. Borrower has authorized [Insert name of authorized
Official(s) who executed Note and Contract] , in [his, her]
capacity (ies) as [Insert title of authorized official(s)] ,
to execute the Contract, the Note and all other documents
necessary or desirable to accomplish the transaction.
3. The Note and the Contract have been duly executed by the
aforementioned authorized representatives] of the Borrower, and
upon delivery thereof, due execution of the Contract and
Guarantee on behalf of HUD, and receipt of the loan proceeds on
behalf of the Borrower, the Note and Contract shall be valid,
binding and enforceable obligations of the Borrower.
4. The pledge of present and future Community Development
Block Grants by the Borrower pursuant to 24 CFR 570.705(b)(2) and
the Contract is valid.
S. There is no outstanding, or to my (our) knowledge
threatened, action, suit, proceeding, investigation or litigation
by or against the Borrower that will affect the validity of the
Note or the security therefor.
Sincerely,
2
po opinion ent 6-4-10
INSTRUCTIONS
[The model opinion and instructions are available electronically
from HUD. Contact your HUD program office representative in the
Financial Management Division or one of the attorneys listed at
the end of the instructions.]
1. Opinions must be signed by an attorney licensed to practice
and in good standing in the applicable State or Commonwealth.
The attorney shall issue the opinion on behalf of a private firm
or local government legal officer or office that represented the
CDBG grantee/section 108 Borrower in the transaction, and it must
be on the firm or office's letterhead. If issued by a firm, the
opinion must be signed on behalf of the firm by a partner or with
the firm name as authorized by the firm. If issued by a
government legal officer or office, the opinion must be signed by
the officer, the head of the legal office, or by a senior lawyer
with authority to bind the office. The appropriate plural
[bracketed] pronouns in the attached model should be used for
opinions signed on behalf of multi -lawyer firms or offices.
2. The language marked "optional" in paragraphs 1 and 2 at the
bottom of page one of the attached model, including citations, is
recommended to evidence 'thoroughness and to enhance the
credibility of the opinion, but it can be omitted in the judgment
of the attorney rendering the opinion. However, citing the
applicable authorizing resolution of the local governing body is
required. Of course, should facts or legal authorities come to
HUD's attention that call an opinion into question, HUD reserves
the right to reject, or require such revision to, any opinion, as
HUD in its sole discretion may determine.
3. The local counsel's opinions are based upon the requirements
of paragraph 4(b) of the Contract and are in support of a HUD
opinion given at closing for the public offering, as required by
the Underwriting Agreement between HUD and the underwriters. The
use of the model opinion without substantial change is strongly
encouraged to permit HUD staff to accept and rely on the opinion
on its face, without time-consuming call-backs, investigation,
and revision. Conditions and qualifying language in legal
opinions require specific review JQy HUD legal staff, may tend to
slow processing of the loan guarantee documentation, and are
generally discouraged, unless they are essential in a particular
case.
However, qualifications which exclude the validity of, or
the authority for, execution of the documents on behalf of the
Borrower from the coverage of the opinion, assume the validity of
such execution, or exempt the signatory attorney from knowledge
of the validity of the execution, are not acceptable. HUD deals
nationally with many cities, counties, and other public bodies,
and cannot independently verify the authority of officials of
those entities. Borrowers counsels' opinions covering proper
execution serve as an important check on such validity.
While not a cause for rejection of an opinion pe.r se, it is
not necessary to qualify an opinion by stating that
enforceability of the documents may be :Limited by bankruptcy,
_insolvency, reorganization, moratorium, liquidation, or similar
general laws or equity principles relating to or affecting
creditors' rights or providing .remedies for the relief of
debtors, or that the availability of specific performance or
injunctive relief in aid of enforcement of the documents may be
limited by equitable rights and defenses. HUD is aware that
there may be exceptions to the enforceability of its rights as a
creditor based on generally applicable laws and equitable
principles; that is why HUD regards the pledge of present and
future CDBG grants, which are controlled by HUD, as the principal
security for .repayment of the notes. The purpose of the legal
opinions is not to get an attorney to act as insurer of the
absolute enforceability of the documents but rather to require
that there has been legal review adequate to assure proper
authorization and execution of the Note and related documents by
the proper parties under State and local law.
4. Separate models are available from HUD for transactions in
which a CDBG grantee is using a designated public agency to issue
the Note and receive the proceeds thereof on its behalf.
Similarly, separate models are available for nonentitlement
grantees and their States, where a State -administered CDBG
nonentitlement recipient is issuing the section 108 -guaranteed
Note. If you are involved in one of the foregoing transactions,
please obtain the appropriate model from the program office (see
paragraph 7 below).
The Borrower is not required to execute the Trust Agreement
or the Amended and Restated Master Fiscal Agency Agreement; those
documents are incorporated by reference in the Contract and the
Note, and the Borrower agrees to the terms of those documents by
executing the Contract and the Note. Copies of the Amended and
Restated Master Fiscal Agency Agreement, Trust Agreement, and the
form of Supplement to the Trust Agreement to be executed on
behalf of the Secretary at closing on the Public Offering Date
should have been included in the package of documents transmitted
to the Borrower by HUD. If they were not, and if you have not
previously reviewed them, please contact the CPD Financial
Management Division phone number at the end of these instructions
for copies, if necessary. The Trust Agreement and the Amended
and Restated Master_ Fiscal Agency Agreement have not changed
since the last public offering, and no significant change is
anticipated in the Supplement to the Trust Agreement except for
dates and the schedules of the obligations covered by the
Supplement.
5. The attorney should assure that the .legal name of the
Borrower in the Note and the Contract is correct and should
2
notify HUD if it is not. The note number to be :inserted in the
opinion in the first paragraph appears in the heading of the
Note. The Aggregate Principal Amount to be inserted also appears
in the heading of the Note and at the end of the Schedule P&I
attached to the Note (these should agree).
[Background - Unlike Section 108 =interim (variable-rate)
financing, the entire Aggregate Principal Amount of the Note will
be disbursed at closing on the Public Offering Date, as
applicable: (i) to pay off interim financing (or a public
offering note being refinanced, if applicable), (ii) for deposit
in the Borrower's Guaranteed Loan Funds Account under paragraph 1
of the Contract, or (iii)(by deduction) to pay the fees referred
to in paragraph 4 of the Contract if so requested by the
Borrower. Also unlike interim financing, Principal Amounts due
on particular Principal Due Dates on Schedule P&I cannot be
amended (even with HUD approval) after closing of the public
offering. Borrower's counsel should assure that the Borrower's
financial officials are satisfied that Schedule P&I accurately
states the .repayment schedule agreed to by the Borrower and HUD.]
"Other Securitv" Opinions
6. If so provided in the Contract, an additional opinion or
opinions may be requested of Borrower's counsel or other counsel
with regard to "other security" as negotiated between HUD and the
Borrower for a particular transaction. If such opinions have
previously been furnished in connection with interim financing,
the same opinions do not have to be submitted again. Generally,
any additional opinions related to other security will be
described in paragraph 15 of the Contract. The Contract may
require such other security opinions to be delivered to HUD with
the executed Note and Contract or at a later time, and the
Contract may provide that they be delivered to a local custodian,
rather than HUD. If so, it is recommended that such opinions be
separate from the attached model opinion required with respect to
execution and validity of the Note and Contract. However, if the
Contract requires the "other security" opinion(s) to be submitted
to HUD at the same time as the model opinion, they may be
combined with the model opinion. Due to the variety of "other
security" provisions, model language for the "other security"
opinions cannot be furnished routinely.
7. If there are any questions, including specific questions
about "other security" opinions, the local CDBG grantee program
office may contact its representative in HUD's Office of
Community Development, Financial Management Division, at 202-708-
1871. Local counsel may also directly call Evelyn Wrin or Carey
Whitehead in HUD's Office of General Counsel at 202.402.5220 or
202.402.3106, respectively, or send an email to
eve1yn.m.wrin@hud.g2v or carey.c.whitehead@hud.gov, with
questions about the opinion.
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WIRE TRANSFER INSTRUCTIONS
FOR REMITTING PAYMENTS TO THE BANK OF NEW YORK MELLON
THE BANK OF NEW YORK MELLON
ABA ROUTING: 021000018
FOR CREDIT TO: [IUD 108 Collection Account
COLLECTIONS ACCOUNT #: 8900606738
TEXT: Indicate Community name
BANK ADDRESS: 101 Barclay Street, 8th Floor East, New York, NY 10286
TELEPHONE: 877-870-7678
ATTENTION: Candi Mattocks
SUPPLEMENT
relating to
$ Aggregate Original Principal Amount
SECTION 108 GOVERNMENT GUARANTEED
PARTICIPATION CERTIFICATES, SERIES HUD
This SUPPLEMENT (the "Series Supplement"), is entered into by the
SECRETARY OF HOUSING AND URBAN DEVELOPMENT (the "Secretary") and
JPMORGAN CHASE BANK (formerly known as Chemical Bank or The Chase Manhattan
Bank), as. trustee (the "Trustee") under the Trust Agreement, dated January 1, 1995, by and
between the Trustee and the Secretary, as sponsor of a Trust created on behalf of certain units of
general local govermnent and public agencies designated by such units of general local
government (the "Agreement"). All capitalized terms used but not defined herein have the
meanings ascribed thereto in the Agreement.
WITNESSETH
WHEREAS, pursuant to the Agreement, the Trustee is to hold in trust certain Notes
guaranteed by the Secretary and to issue Certificates evidencing beneficial interests in a trust
consisting of such Notes (the "Trust"); and
WHEREAS, pursuant to the Agreement, the Secretary and the Trustee are to enter into
this Series Supplement whereby the Secretary delivers the Notes and related Guarantee
to the Trustee and the Secretary directs the Trustee to issue the Certificates (the "Series
Certificates");
NOW, THEREFORE, in consideration of these premises, the parties agree as follows:
Delivery and Acknow led �t� nent.
The Secretary hereby delivers to the Trustee (a) the Notes (together with any
necessary endorsements thereon) listed on the attached Schedule 1, as identified by Borrower,
Aggregate Principal Amounts, Principal Amounts, Principal Due Dates and interest rates and (b)
the related Guarantee to hold in trust for the benefit of the Certificate holders. The Secretary
acknowledges the terms and conditions of the Agreement and hereby agrees that the Trust shall
be governed by the terms thereof as amended hereby. The term "Trust" as used herein shall refer
to that Trust established as a result of the delivery to the Trustee of the Notes and related
documents referred to herein.
2. Authority to Issue Certificates.
The Secretary hereby directs the Trustee, as agent for the Secretary, to issue Series
Certificates with respect to the Trust as follows:
a. Name of Series. The designation of the Series authorized hereby shall be
"Section 108 Government Guaranteed Participation Certificates, Series HUD ,
Guaranteed by the Secretary of Housing and Urban Development."
b. Issuance of Certificates. Pursuant to Section 2.03 of the Trust Agreement,
the Trustee is hereby authorized and directed to execute on behalf of the Secretary, authenticate
and deliver, on this date, in the naive of the Certificateholder, the Series
Certificates specified on the attached Schedule 2 against receipt of the Notes, the related
Guarantee and this Series Supplement.
Acknowledgments and Certifications.
a. The Secretary hereby certifies that it has satisfied all conditions on its part
to be performed or satisfied as a condition to the issuance of the foregoing Certificates. Without
limiting the provisions of Section 3.11 and Section 7.01 of the Agreement, the Secretary further
certifies that the Trustee shall be paid, for services rendered in connection with the
administration of the Trust assets listed on the attached. Schedule 1, and pursuant to Section 7.01
of the Agreement, a fee of $
b. The Trustee hereby acknowledges receipt of the Trust assets listed on the
attached Schedule 1.
C. This Series Supplement shall constitute the Supplement
referred to in Section 2.01 of the Agreement.
4. Modification and Ratification of the Agreement.
a. Solely for purposes of this Series Supplement and the Series
Certificates, the definition of "Optional Redemption" set forth in Article I of the
Agreement is hereby deleted in its entirety and replaced as follows:
"Optional Redem tp ion: The full or partial prepayment of a Principal
Amount due on a Note by a Borrower in accordance with the optional redemption
provisions (if any) of such Note, such optional redemption provisions to provide,
among other things, that such an Optional Redemption (i) shall be made only as of
any Interest Due Date occurring on or after the date specified in the related Note
after which such Optional Redemptions are permitted, (ii) must be received in Rill
by the Trustee by wire transfer of immediately available funds to the Certificate
Account on the related Note Payment Date, and (iii) must be accompanied by an
identification of the Borrower by name, the HUD -assigned Note number and such
other information as the Secretary or the Trustee may specify."
b. Solely for purposes of this Series Supplement and the Series
Certificates, the last sentence of the first paragraph of Section 3.03 of the Agreement
is hereby deleted in its entirety and replaced as follows:
"The Trustee shall apply any payments received in respect of permitted
Optional Redemptions to the outstanding Principal Amounts of the related Note
designated in the instructions of the related Borrower set forth in the above
mentioned notice, in each case, as approved in writing by the Secretary."
C. Solely for purposes of this Series Supplement and the Series
Certificates, the first and second paragraphs of Section 3.07 of the Agreement are
hereby deleted in their entirety and replaced as follows:
"Any Borrower may defease the unpaid aggregate Principal Amount of a
Note, or the unpaid Principal Amount due on a Principal Due Date, in whole or in
part, at any time, subject to the corresponding Contract and this Agreement. For
each Note or Principal Amount (or portion thereof) that the related Borrower
elects to defease, the Borrower shall establish and maintain with the Trustee a
trust account (a "Defeasance Account"), separate and apart from all other accounts
of such Borrower and the Trustee. The Borrower shall irrevocably deposit into
such account either moneys or Government Obligations that, in the sole discretion
of the Secretary, mature and bear interest at times and in amounts sufficient,
together with the moneys already on deposit with the Trustee for such purpose, to
pay when due the principal and interest to become clue with respect to the related
Principal Amount (or portion thereof) that the Borrower elects to defease, in
accordance with the notice of the Borrower as specified below.
The Borrower's election to defense shall be evidenced by giving written
notices to the Trustee and the Secretary, which notices shall authorize and direct
the establishment of the related Defeasance Account, shall specify the money and
Government Obligations to be deposited therein and shall specify the particular
Principal Amounts (or portions thereof) being defeased and the related Principal
Due Date(s) and Optional Redemption Date(s) (consistent with the related Note
and Contract). For all purposes of this Agreement, to the extent that a Principal
Amount (or portion thereof) is so specified for defeasance in accordance with the
Contract, such specification shall constitute an election to redeem on the date
specified in the foregoing notice for purposes of the related Note, subject to
approval of the Secretary. Upon and in accordance with the Secretary's
instructions pursuant to the corresponding Contract, the Trustee shall apply so
much of the sums deposited into a Defeasance Account as shall be necessary to
purchase the Government Obligations designated by the Secretary's instructions.
If the funds deposited were insufficient, or there were excess funds deposited, the
Trustee shall follow the Secretary's directions as to the disposition of such funds."
d. The Agreement as modified and supplemented by this Series
Supplement with respect to the Series Certificates (but which modification and
supplement shall not apply to any other Series of Certificates unless otherwise specified in the
related Supplement for such Series of Certificates) is in all respects ratified and confirmed, and
the Agreement as so modified and supplemented by this Series Supplement shall
be read, taken and construed as one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Series Supplement
to be executed as of the day of , 20
SECRETARY OF HOUSING AND URBAN DEVELOPMENT
Signature
Name:
Title:
JPMORGAN CHASE BANK, as Trustee
Signature
Name:
Title:
SCHEDULE 1 TO SERIES SUPPLEMENT
TO "TRUST AGREEMENT
PRINCIPAL
f1TIF nATR
August 1,
August 1,
August 1,
August 1,
August 1,
August 1,
August 1,
August 1,
August 1,
August 1,
August 1,
August 1,
August 1,
August 1,
August 1,
August 1,
August 1,
August 1,
August 1,
August 1,
TRUST ASSETS ASSIGNED TO TRUSTEE
7
INTEREST RATE
Principal Amounts Due on August 1,
Borrower Aggregate
Principal
Amounts
Principal Amounts Due on August 1,
Aggregate
Borrower Principal
Amounts
SCHEDULE 2 TO SERIES SUPPLEMENT
TO TRUST AGREEiVIENT
CERTIFICATES TO BE ISSUED
CUSIP Number Principal Amount Maturitv Date[ Interest Rate
Principal amounts due on or after August 1, are subject to earlier payment upon an Optional
Redemption or an Acceleration Event.
10