HomeMy WebLinkAbout2004-267I
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RESOLUTION NO. 2004-267
A RESOLUTION OF THE MAYOR AND COMMON COUNCIL
APPROVING THE AUGUST 2004 MEMORANDUM OF AMENDMENT
TO THE HUD SECTION 108 LOAN GUARANTEE AGREEMENT BY
AND BETWEEN THE UNITED STATES DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT (HUD) AND THE CITY OF SAN
BERNARDINO (303 LLC PROJECT)
WHEREAS, 303, L.L.C., a California limited liability company (the `Borrower") and
the City of San Bernardino (the `City") have previously entered into that certain loan agreement
entitled "2000 Community Development Block Grant Program Section 108 Project
Development Loan Agreement", dated as of September 18, 2000, as amended (the
"Agreement"); and
WHEREAS, the City has previously disbursed to the Borrower the sum of One Million
Six Hundred Four Thousand Seventy Four Dollars and Six Cents Dollars ($1,604,074.06),
exclusive of funded interest under the terms of the Agreement for the acquisition of the "303
Third Street Parcel' and for the construction and installation of the "Borrower Improvements
(Phase 1)", as these terms are defined in the Agreement; and
WHEREAS, on July 21, 2003, the Mayor and Common Council authorized the City to
amend the Commitment Schedule to defer the original principal payment of $100,000 due on
August 1, 2003 to August 1, 2004 and authorized a corresponding Amended Commitment
Schedule for Note No. 13-99-MC-36-0003-13 in the amount of $1,840,000;
WHEREAS, on August 4, 2003, the Comnumity Development Commission of the City
of San Bernardino approved an Amendment to the 2000 Owner Participation and EDI Loan
Agreement by and between the Owner and the Agency to defer the repayment of the scheduled
HUD Section Loan in accordance with the terms of the 2003 City Section 108 Loan Agreement;
and
WHEREAS, the Owner has negotiated a purchase and sale agreement with the County
of San Bernardino ('County") for improvement and sale of the 303 Third Street Parcel for
which the County will acquire the 303 Third Street Parcel ("Sale") upon completion of certain
1':,(ll R; [N.,,'0704 Mee Rrvdntlun 303 LL( Mullon ldur
2004-267
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tenant improvements ("tenant Improvements") by the Owner in order to accommodate the
relocation of the Superior Court of California; and
WHEREAS, in order to facilitate the Owner and County Sale, the Owner has requested
that the Agency take certain actions to enable the Agency and the City to subordinate its HUD
Section 108 Loan in the approximate amount of $1.8 million to a Senior Construction Loan in
the approximate amount of $15 million of which the Owner will use a portion of said Senior
Construction Loan to accomplish the Tenant Improvements to the 303 Third Street Parcel and
furthermore the Owner has requested that the Agency and City consider deferring the Section
108 Loan repayment clue date of August 1.2005 and August 1, 2006; and
WHEREAS, in order to accomplish the construction of the Tenant Improvements and
facilitate the Sale to the County, the City finds it appropriate and necessary to amend those
certain agreements as provided for in the August 2004 Memorandum of Amendment to the
Section 108 Loan Guarantee Agreement by and between the United States Department of
Housing and Urban Development (HUD) and the City of San Bernardino (303 LLC Project).
NOW, THEREFORE, IT IS HEREBY RESOLVED, DETERMINED AND ORDERED
BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, AS
FOLLOWS:
Section 1. The Mayor and Common Council hereby approves the form of the
August 2004 Memorandum of Amendment to the Section 108 Loan Guarantee Agreement by
and between the United States Department of Housing and Urban Development and the City of
San Bernardino (303 LLC Project), dated as of August 16, 2004 (the "2004 Section 108 Loan
Agreement Amendment') in the form attached hereto as Exhibit "A". The Mayor, City Clerk
and the Executive Director of the Economic Development Agency are hereby authorized and
directed to execute the 2004 Section 108 Loan Agreement Amendment on behalf of the City
together with such technical and conforming changes as may be approved by the Mayor upon
the recommendation of special legal counsel to the City and the Executive Director of the
Economic Development Agency.
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I'M DDe. DePMleggie\Draft Dned90704 Mee R—&.1inn 303 11G Mu1inn AA-
2004-267
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Section 2. This Resolution shall take effect upon its adoption and execution in the
manner as required by the City Charter.
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PXDBG Dept\Mnggln\Drnft D... \70704 MCC Besolwwn 303 LLC- Motion A.doe
2004-267
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A RESOLUTION OF THE MAYOR AND COMMON COUNCIL
APPROVING THE AUGUST 2004 MEMORANDUM OF AMENDMENT
TO THE HUD SECTION 108 LOAN GUARANTEE AGREEMENT BY
AND BETWEEN THE UNITED STATES DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT (HUD) AND THE CITY OF SAN
BERNARDINO (303 LLC PROJECT)
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
Common Council of the City of San Bernardino at a it. reg. meeting thereof, held on the
16th day of August , 2004, by the following vote to wit:
Council Members: Ayes Nays Abstain Absent
ESTRADA x
LONGVILLE x
MCGINNIS _x
DERRY x
KELLEY x
JOHNSON x
MC CAMMACK _x_
Ra 1 G. Clark, City Clerk
The foregoing resolution is hereby approved this Ai-, day of August 2004.
Approved as to form and Legal Content:
By:
Special Cou sel
Kuc}ithh-Valles, Mayor
C' v of San Bernardino
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I'9CDUG Dep A1;,,gie\D-fi DoarV07114 AICC Ri-Inlion 303 LLC- Mot'on A.Joe
2004-267
AUGUST 2004
MEMORANDUM OF AMENDMENT TO
SECTION 108 LOAN GUARANTEE COMMITTMENT
(B-94-MC-06-0539-A)
AWARDED TO THE CITY OF SAN BERNARDINO, CALIFORNIA
2000
COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
SECTION 108 PROJECT DEVELOPMENT LOAN
($1,840,000 FOR THE 303 THIRD STREET PROJECT)
THIS AUGUST 2004 MEMORANDUM (the "August 2004 Memorandum") is dated as
of August 16, 2004 and is delivered by the City of San Bernardino (the "City") to the United
States Secretary of the Department of Housing and Urban Development ("HUD") in light of the
facts set forth in the following recitals:
- - RECITALS - -
A. HUD and the City are parties to that certain Contract for Loan Guarantee
.Assistance, dated as of September 26, 2000, as amended by First Amendment to Contract for
Loan Guarantee Assistance, dated March 5, 2001, as modified by a letter addressed to the City
from HUD, dated September 18, 2002 (collectively the "HUD Contract") pursuant to which the
City has been authorized to loan up to One Million Eight Hundred Forty Thousand Dollars
($1,840,000) of Community Development Block Grant Program Section 108 guaranteed funds to
303, L.L.C., a California limited liability company (the "Obligor") in connection with the
acquisition and development of certain property referred to by the City as "303 Third Street
Property", San Bernardino, California.
B. The City has provided the proceeds of the HUD Grant Program Section 108 Loan
Guaranteed fund as authorized under the HUD Contract to the Obligor in accordance with the
terms and conditions of a loan agreement entitled, "2000 Community Development Block Grant
Program Section 108 Project Development Loan Agreement", dated as of September 18, 2000,
as amended (the "Obligor Loan Agreement') by and between the Obligor and the City.
C. In order to accommodate the completion of certain further improvements to the
303 Third Street Property, to be undertaken and financed by the Obligor in preparation for sale
and disposition of 303 Third Street Property by the Obligor to the County of San Bernardino for
occupancy and use by the County of San Bernardino as office space for certain judicial functions
and services of the Superior Court of San Bernardino County, the City has requested HUD to
approve certain technical modifications of the HUD Contract, as set forth below in the following
sections of this August 2004 Memorandum.
2004-267
D. Concurrently with the approval of this August 2004 Memorandum by
HUD and the City, the Obligor and the City shall execute a conforming amendment to the
Obligor Loan Agreement in order to accommodate the completion by the Obligor of certain
improvements to the 303 Third Street Property.
NOW, THEREFORE, HUD AND THE CITY HEREBY AGREE AS FOLLOWS:
Section 1. The text of the HUD Contract is hereby incorporated into this August
2004 Memorandum by this reference. Unless the context of the usage of a particular term or
phrase used in this August 2004 Memorandum may otherwise require, the meaning of terms and
phrases as used in the August 2004 Memorandum shall be the same as set forth in the HUD
Contract.
Section 2. Reference is hereby made to that certain agreement dated June 29, 2004,
by and between San Bernardino Punty and the Obligor entitled "Agreement for Purchase and
Sale of Real Property between The County of San Bernardino and 303, L.L. C." (the "County
Property Purchase Contract"). The Obligor has represented and warranted to the City that the
County Property Purchase Contract is in full force and effect as of the date of this August 2004
Memorandum, and that such County Property Purchase Contract is enforceable by the Obligor in
accordance with its terms. A true and correct copy of the County Property Purchase Contract is
on file with the County Clerk and is attached herewith.
Section 3. The City hereby represents to HUD that as of the date of this August 2004
Memorandum, no default exists under the Obligor Loan Agreement.
Section 4. . The City hereby represents and confirms to HUD that as of the date of this
August 2004 Memorandum, the City has taken no action in furtherance of the authority granted
to the City by HUD under the terms of the letter of HUD, dated September 18, 2002, addressed
to the City. The Borrower Letter of Credit remains in full force and effect. The City shall cause
the Obligor to maintain the Borrower Letter of Credit until the earliest of the following dates
occur:
(i) the Obligor causes the "Section 108 Loan", as this term is defined in the Obligor
Loan Agreement, to be paid in full; or
(ii) the conditions set forth in the Obligor Loan Agreement for the release of the
Borrower Letter of Credit have been satisfied by the Obligor.
Section 5. (a) Paragraph 15 of the HUD Contract is hereby amended by
modifying the provisions of Paragraph 15(c)(i) to read as follows:
"[HUD Contract Paragraph 15(c), Obligor Note, Obligor Loan Agreement and
Obligor Collateral...]
"(i) A lien on the real property described in Attachment 3 hereof (the
"Property"), established through an appropriate and properly recorded deed of
4911-o7G4-iI84I
2004-267
trust (the "Deed of Trust"). The Deed of Trust may be subordinate to a first lien
^� of no more than Fifteen Million Dollars ($15,000,000) (a "First Lien") and shall
contain such provisions as the Secretary deems necessary. In no event shall the
loan -to -value ratio of the Guaranteed Loan Funds disbursed to the Obligor, plus
the First Lien amount, exceed 80% of the appraisal loan value of the Property, as
determined by the appraisal approved by the beneficiary under such First Lien, or
as determined by the appraisal provisions in Paragraph 15(e)(xi) of this Contract."
(b) Paragraph 15 of the HUD Contract is hereby amended by modifying the
provisions of Paragraph 15(c)(iii) to read as follows:
[HUD Contract Paragraph 15(c)... Obligor Note, Obligor Loan Agreement and
Obligor Collateral...]
"(iii) Any and all fights, titles, and interests of the Obligor in any to any
licenses, permits, and other agreements covering the Property. Such rights, title
and interests shall be the subject of a collateral assignment of interest in licenses,
permits, and other agreements (the "Collateral Assignment of Interest in Licenses
Permits and Agreements"). The Collateral Assignment of Interest in Licenses,
Permits and Agreements shall be in a form acceptable to the Secretary. The
Obligor shall also assign to the Borrower as additional collateral under the
Obligor Loan Agreement, the rights of the Obligor under the County Property
Purchase Contract, subordinate to the collateral security rights therein of the
beneficiary under the First Lien, and such collateral assignment by the Obligor to
the Borrower shall be evidenced by a written supplement to the Collateral
Assignment of Interest in Licenses, Permits and Agreements prepared by the
Borrower in a form acceptable by the Secretary."
Section 6. The "Commitment Schedule" for the Borrower $1,840,000 Promissory
Note under the HUD Contract, is hereby modified to provide for installment payments of
principal by the City to HUD, and its assigns, as follows:
"COMMITMENT SCHEDULE - Note No. B-94-MC-06-0539-A
Principal Due Date
.August 1, 2001
August 1, 2002
August 1, 2003
August 1, 2004
August 1, 2005
August 1, 2006
August 1, 2007
August 1, 2008
August 1, 2009
August 1, 2010
Commitment Amount
$ -0-
-0-
-0-
100,000
-0-
-0-
100,000
100,000
100,000
100,000
4S11-6764-5IS4.I
3
2004-267
August 1, 2011
100,000
August 1, 2012
$ 100,000
August 1, 2013
100,000
August 1, 2014
100,000
August 1, 2015
100,000
August 1, 2016
100,000
August 1, 2017
100,000
August 1, 2018
100,000
August 1, 2019
100,000
August 1, 2020
440,000
Maximum Commitment Amount
1 840 00"
Section 7. HUD hereby authorizes the City to make certain technical revisions and
amendments to the Obligor Lpan Agreement, and the related Obligor Section 108 Loan
documents, in which the City has previously assigned its security interest to HUD as collateral
security in favor of HUD under the HUD Contract, as consistent with this August 2004
Memorandum, in order to accommodate the financing and construction and completion of
improvement of the "303 Third Street Property", as this term is defined in the Obligor Loan
Agreement, by the Obligor pursuant to the terns and conditions of the County Property Purchase
Contract.
Section 8. Except as modified or amended by this August 2004 Memorandum, all
other provisions of the HUD Contract shall remain in full force and effect, and the HUD
Contract, as hereby modified and amended by this August 2004 Memorandum, is hereby
declared by the City to be enforceable in accordance with its terms.
Section 9. The Mayor, in consultation with special legal counsel to the City, is
hereby authorized and directed to execute such instruments and certificates addressed to HUD as
HUD may request in order to implement the provisions of this August 2004 Memorandum. If
requested by HUD and approved by the Mayor, special legal counsel to the City is hereby further
authorized to submit an approving legal opinion to HUD regarding the matters contemplated
under this August 2004 Memorandum.
48 i s-6w4-5184 1 4
2004-267
THIS AUGUST 2004 MEMORANDUM may be executed in counterparts by the
authorized officers of the parties.
Date:
Date: AG+ A; ;)Q y
APPROVED AS TO FORM:
S f.e,• I Legal Cou-n el for the City
HUD
United States Secretary of the Department
of Housing and Urban Development
M
CITY
City of San Bernardino, California
By: ��, i e
a or, ity of San Bernardino
4813-G764-5184.1 5
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
SECOND AMENDMENT TO
CONTRACT FOR LOAN GUARANTEE ASSISTANCE UNDER
SECTION 108 OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT
OF 1974, AS AMENDED, 42 U.S.C. 55308
DEr 1 5 2004
Date of Amendment
BORROWER: City of San Bernardino, California
COMMITMENT NUMBER: B-94-MC-06-0539-A
MAXIMUM COMMITMENT AMOUNT: S 1,840,000
OBLIGOR: 303 LLC
This Second Amendment is entered into, by and between, the
Secretary of Housing and Urban Development ("Secretary") and the
City of San Bernardino, California, as Borrower ("Borrower").
RECITALS
WHEREAS, the Secretary and Borrower entered into a certain
Contract for Loan Guarantee Assistance dated as of September 26,
2000 (the "Contract"); and
WHEREAS, the Contract was subsequently amended by a First
Amendment dated March 5, 2001 and was modified by a letter from
HUD to the Borrower dated September 18, 2002; and
WHEREAS, Borrower used the Guaranteed Loan Funds to make a
loan to Obligor for the acquisition and rehabilitation of real
property; and
WHEREAS, in order to accommodate the completion of certain
further improvements to the 303 Third Street Property to be
undertaken and financed by the Obligor in preparation for sale
and disposition of 303 Third Street Property by the Obligor, the
City has requested HUD to approve certain modifications of the
HUD Contract; and
WHEREAS, concurrently with the approval of this Second
Amendment by HUD and the Borrower, the Obligor and the Borrower
shall execute a conforming amendment to the Obligor Loan
Agreement and related loan documents in order to accommodate the
completion by the Obligor of certain improvements to the 303
Third Street Property; and
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WHEREAS, the Secretary and Borrower now desire this Second
Amendment to the Contract to further clarify and facilitate the
consummation of the transaction contemplated therein:
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreement set forth herein, the Secretary
and Borrower mutually agree that the Contract be and hereby is
amended as follows:
Paragraph 15 of the Contract is amended by deleting the paragraph as
written in its entirety and substituting therefor the following:
15. Special Conditions and Modifications:
(a) Paragraph 5(c) of the Contract is amended by deleting the
paragraph as written in its entirety and substituting
therefor the following:
"(c) Other security, including, but not limited to, all
rights of the Borrower (but none of the obligations of
the Borrower) in and to the `Security Documents' (as
defined in paragraph 15(d) hereof) and to the collateral
described therein. If necessary to provide the
Secretary with a valid security interest in such other
security, the Borrower shall execute a security
agreement (the `Borrower Security Agreement'), which
Borrower Security Agreement shall be in a form
acceptable to the Secretary."
(b) Guaranteed Loan Funds shall be used by the Borrower to
make a loan to 303 LLC (the "Obligor") for acquisition,
remediation and rehabilitation of certain property
referred to by Borrower as the "303 Third Street
Property", pursuant to 24 CFR 570.703(i)(1).
(c) The loan to the Obligor shall be evidenced by a
promissory note (the "Obligor Note") and a loan
agreement (the "Obligor Loan Agreement"), which
Obligor Note and Obligor Loan Agreement shall be in a
form acceptable to the Secretary and shall be notified to
reflect any changes in the Contract. The amount of
principal and/or interest payable under the Obligor Note
during the twelve month period beginning July 1 of each
year and ending on June 30 of the next succeeding year
shall be equal to or greater than the amount of principal
and/or interest payable under the Note for the
corresponding period. The Obligor Note shall not be
subject to redemption or repayment earlier than the
earliest possible redemption date under the terms of the
Note. As security for the Obligor Note, the Borrower
shall obtain the following collateral (collectively, the
"Collateral"):
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(i) A lien on the real property described in
Attachment 3 hereof (the "Property"), established
through an appropriate and properly recorded deed
of trust (the "Deed of Trust"). The Deed of Trust
may be subordinated to a first lien of no more
than $15,000,000 (a "First Lien") and shall contain
such provisions as the Secretary deems necessary.
In no event shall the loan -to -value ratio of the
Guaranteed Loan Funds disbursed to the Obligor,
plus the First Lien amount, exceed 80% of the
appraised value of the Property, as determined by
the appraisal provisions in paragraph 15(e)(xi) of
this Contract.
(ii) Any and all rights, titles, and interests of the
Obligor in and to any leases covering the Property.
Such rights, titles, and interests of the Obligor
shall be the subject of a collateral assignment of
leases and rents (the "Collateral Assignment of
Leases and Rents"). The Collateral Assignment of
Leases and Rents shall be in a form acceptable to
the Secretary.
(iii) Any and all rights, titles, and interests of the
Obligor in and to any licenses, permits, and other
agreements covering the Property including the
rights of the Obligor under the Agreement for
Purchase and Sale of Real Property between the
County of San Bernardino and the Obligor (the
"County Property Purchase Contract"). Such rights,
titles, and interests shall be the subject of a
collateral assignment of interest in licenses,
permits, and other agreements (the "Collateral
Assignments of Interest in Licenses, Permits, and
Agreements"). The Collateral Assignment of
Interest in Licenses, Permits, and Agreements
shall be in a form acceptable to the Secretary.
(iv) Personal guaranties (collectively, the
"Personal Guaranty") of Kevin Brunk,
Wilfred C. Lemann and Martin A. Matich (the
"Personal Guarantors"). The Personal
Guaranty shall be in a form acceptable to the
Secretary. Provided no default may then
exist under the Obligor Loan Agreement and
collateral, the Personal Guaranty shall be
released on the first of the following dates
to occur: (A) the full and final repayment
of the Note with no event of default; (B) HUD
approval of the defeasance by the Borrower of
all amounts due under the Note; or (C) the
first anniversary following the date on which
the Borrower has permitted the Obligor to
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withdraw the Letter of Credit under Section
15(c)(v) below.
(v) An unconditional and irrevocable letter of credit
(the "Letter of Credit") from the Obligor in favor of
the Borrower. The Letter of Credit shall be at all
times in an amount of $200,000. The Letter of Credit
shall be in a form acceptable to the Secretary and
shall be issued by a financial institution ("Issuer")
acceptable to the Secretary. The Issuer shall be a
member of the Federal Reserve System, have a rating
of at least "A2", as determined by Moody's Bank
Credit Report Service ("Moody's"), for its long term
bank deposits, and must reflect an outstanding standby
Letter of Credit balance of $50 million or more on its
most recent Call Report to its supervisory agency.
The rating must be in effect as of the date of receipt
of the Letter of Credit by the Custodian (as defined
in paragraph 15(d) below). The Letter of Credit shall
bear an expiration date (the "Expiration Date") one
year from the first day of the month following the
date of execution of the Obligor Note and shall
provide for automatic renewal for successive periods
of one year each as of the Expiration Date until such
time as the security interest of the senior
construction lender in the Property is released and
reconveyed and the Obligor demonstrates to the
satisfaction of the Borrower that the Obligor has
achieved a rental occupancy level of the Property by
tenants which produces a debt service coverage ratio
under the senior permanent loan, secured by the First
Lien, plus the Obligor Note, of not less than 110%,
net of property taxes, insurance costs, building
maintenance, management, and prudent replacement
reserved. At such time, the Obligor may be permitted
to withdraw the Letter of Credit. Any change with
respect to the Letter of Credit subsequent to its
deposit with the Custodian must be approved by both
the Borrower and the Secretary. The Borrower will be
responsible for demanding payment under the Letter of
Credit if necessary.
(vi) Such other alternative collateral or security
arrangements as may be requested by the Borrower and
approved by the Secretary in writing.
(d) The Borrower shall select a financial institution
acceptable to the Secretary (the "Custodian") to act as
custodian for the documents specified in (e) below
(hereinafter referred to as the "Security Documents").
The Borrower and the Custodian shall enter into a
written agreement containing such provisions as the
Secretary deems necessary. A fully executed copy of
such agreement, with original signatures, shall be
forwarded to the Secretary contemporaneously with the
delivery of documents pursuant to (e) below.
(e) Not later than five business days after the initial
disbursement of the Guaranteed Loan Funds to the
Obligor, the Borrower shall deliver to the Custodian
the following:
(i) The original Obligor Note, endorsed in blank and
without recourse.
(ii) The original Obligor
assignment thereof
assignment shall be
the Secretary.
Loan Agreement and an
to the Secretary, which
in a form acceptable to
(iii) The original recorded Deed of Trust signed by
the Obligor and an assignment thereof to the
Secretary, in a recordable form but unrecorded,
which assignment shall be in a form acceptable
to the Secretary.
(iv) The original recorded Collateral Assignment of
Leases and Rents and an assignment thereof to the
Secretary, in a recordable form but unrecorded,
which assignment shall be in a form acceptable to
the Secretary.
(v) The original Collateral Assignment of Interest in
Licenses, Permits, and Agreements and an
assignment thereof to the Secretary, which
assignment shall be in a form acceptable to the
Secretary.
(vi) The original Personal Guaranty and a collateral
assignment thereof to the Secretary, which
assignment shall be in a form acceptable to the
Secretary.
(vii) The original Letter of Credit and a collateral
assignment thereof to the Secretary, which
assignment shall be in a form acceptable to the
Secretary.
(viii) An opinion of the Borrower's counsel, addressed
to the Secretary and on its letterhead, that:
(A) the Obligor is a limited liability company,
duly organized, validly existing, and in
good standing under the laws of the State of
California;
(B) the Obligor Note has been duly executed and
delivered by a party authorized by the
Obligor to take such action and is a valid
and binding obligation of the Obligor,
enforceable in accordance with its terms,
except as limited by bankruptcy and similar
laws affecting creditors generally; and
(C) the security instruments specified in (ii)
through (vii) above are valid and legally
binding obligations, enforceable in
accordance with their respective terms.
(ix) A mortgage title policy, issued by a company
and in a form acceptable to the Secretary,
naming the Borrower as the insured party. The
policy must either include in the definition of
the "insured" each successor in ownership of
the indebtedness secured by the Deed of Trust
or be accompanied by an endorsement of the
policy of the Secretary.
(x) A certified survey with a legal description
conforming to the title policy and the
Mortgage.
(xi) An appraisal of the fee simple ownership
interest in the Property specifying an estimate
of fair market value of not less than 125% of
the sum of the following:
(A) the maximum authorized principal amount of
the Obligor Note;
MINUS
(B) the principal amount
Credit delivered to
Obligor as provided
above.
of the Letter of
the Borrower by the
in Section 15(c)(v)
The appraisal shall be completed by an
appraiser who is certified by the state and
has a professional designation (such as "SRA"
or "MAI"), and shall conform to the standards
of the Financial Institutions Reform, Recovery
and Enforcement Act of 1989 ("FIRREA").
(xii) Any instruments, documents, agreements, and legal
opinions required pursuant to paragraph 15(c)(vi).
(f) Paragraph 12 is amended by adding at the end thereof
the following language:
"(g) The Secretary may complete the endorsement of the
Obligor Note and record the assignments referred
to in paragraph 15(e) and thereby effectuate the
transfer of the documents referenced and
underlying indebtedness from the Borrower to the
Secretary or the Secretary's assignee."
"(h) The Secretary may exercise or enforce any and all
other rights or remedies (including any and all
rights and remedies available to a secured party
under the Uniform Commercial Code) available by
law or agreement (including any of the Security
Documents, as defined in paragraph 15(d) against
the Collateral, against the Borrower, against the
Obligor, against the Personal Guarantors, or
against any other person or property."
(g) The Borrower agrees that it shall promptly notify the
Secretary in writing upon the occurrence of any event
which constitutes a default (an "Event of Default")
under (and as defined in) any of the Security
Documents, as defined in paragraph 15(d). Notification
of an Event of Default shall be delivered to the
Secretary as directed in paragraph 12(f) above. Upon
the occurrence of an Event of Default, the Secretary
may (without prior notice or hearing, which Borrower
hereby expressly waives), in addition to (and not in
lieu of) exercising any and all remedies that may be
available under the Security Documents, declare the
Note in Default and exercise any and all remedies
available under paragraph 12. This paragraph 15(g)
shall not affect the right of the Secretary to declare
the Note in Default pursuant to paragraph 11 and to
exercise in connection therewith any and all remedies
available under paragraph 12.
(h) The Borrower covenants and agrees that it shall
establish and maintain a reserve (the "Debt Service
Reserve") in the Loan Repayment Account for payment of
principal and/or interest on the Notes upon notice from
the Secretary to the Borrower at the address specified
in paragraph 12(f) above that the Secretary in his sole
discretion has determined that grants pledged pursuant
to paragraph 5(a) are unlikely to be sufficient to pay
when due the amounts to become due on the Notes. Such
notice shall be hereinafter referred to as the "Notice
of Inadequate Security." The Debt Service Reserve
shall be established in an amount determined by an
independent financial advisor acceptable to the
Secretary (the "Financial Advisor") in accordance with
a methodology acceptable to the Secretary. The Debt
Service Reserve shall be fully (100%) and continuously
e
invested in Government obligations, as defined in
paragraph 10 hereof, which investments shall be held in
trust for the benefit of the Secretary in the
Guaranteed Loan Funds Investment Account as provided in
paragraph 6(a) hereof. Grants pledged pursuant to
paragraph 5(a) may be used to fund the Debt Service
Reserve in whole or in part. The Borrower shall engage
the Financial Advisor and shall instruct it to submit
to the Secretary for his review and approval the
methodology it proposes to use in determining the
amount of the Debt Service Reserve, which submission
shall include any comments and/or recommendations of
the Borrower regarding the acceptability of the
methodology. Such submission shall not be required if
the selection of the Financial Advisor and the
application of the methodology comply with guidelines
promulgated by the Secretary subsequent to the date of
this Contract. Within 60 days of the Notice of
Inadequate Security, the Borrower shall furnish to the
Secretary at the address specified in paragraph (12)
above acceptable evidence that the Debt Service Reserve
has been established in the manner prescribed above
(including such certifications and/or opinions by the
Financial Advisor as the Secretary deems necessary).
The Debt Service Reserve shall be maintained in an
amount consistent with an amortization schedule
developed by the Financial Advisor and approved by the
Secretary.
(i) The Grant Agreement, dated September 26, 2000 for the
grant made to the Borrower pursuant to Section 108(q),
under grant number B-93-ED-06-0539, is hereby
incorporated in this Contract and made a part hereof.
[Rest of Page Intentionally Left Blank]
E
THE PARTIES HERETO have executed this Second Amendment to
the Contract, it being understood and agreed that no provisions of
the Contract, other than those in paragraph 15 as set forth above,
have been changed, and that the Contract as amended continues in
full force and effect.
(Name)
(Title)
v (Date)
SECRETARY OF HOUSING AND URBAN
(Signature)
Nelson R. Br
(Name)
General Deputy Assistant Secretary
for Community Planning & Development
(Title)
DES 15 2004
(Date)
Principal Due Date
August 1, 2003
August 1, 2004
August 1, 2005
August 1, 2006
August 1, 2007
August 1, 2008
August 1, 2009
August 1, 2010
August 1, 2011
August 1, 2012
August 1, 2013
August 1, 2014
August 1, 2015
August 1, 2016
August 1, 2017
August 1, 2018
August 1, 2019
August 1, 2020
August 1, 2021
August 1, 2022
AMENDED COMMITMENT SCHEDULE
Note No. B-94-MC-06-0539-A
Commitment Amount
$0
100,000
0
0
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
440,000
Maximum Commitment Amount $1,840,000
Pursuant to Section IV.H. of this Note originally dated as of Se to ber 26 2000, the
amended Commitment Schedule above is hereby accepted and reed to on behalf
of the Borrower, shall supersede the original Commit nt Sc edule, and shall be
attached to the Note in lieu of the original Commitment c dole.
th Valles
(Name)
(Title)
(Date)