HomeMy WebLinkAboutAmended Commitment Schedule
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AMENDED COMMITMENT SCHEDULE
Note No.
B-94-MC-12-00 14
Principal Due Date
Commitment Amount
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
August 1,2011
August 1,2012
August 1,2013
August 1,2014
August 1,2015
305,000
320,000
340,000
360,000
380,000
405,000
210,000
210,000
210,000
210,000
210,000
210,000
210,000
210,000
210,000
$4,000,000
Maximum Commitment Amount
Pursuant to Section IV.H. ofthis Note originally dated
amended Commitment Schedule above is hereby acce te an
of the Borrower, shall supersede the original Commo me t
attached to the Note in lieu of the original Commit ent
David Dermer
(Name)
Mayor
(Title)
April 6, 2006
(Date)
l1J,o'l::V- d!D5
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03C a::J'11 IEJ DItJ -t 913056"lS,O"c'
NO. 430 I7.2B
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e MIAMI BEACH
CItJ of Miami Buch. '700 Coovel'ltiort Centei' Dm.e. MIami Beach, F1Ol1Oa 33139, www.1I1iarnibeac:hll.QCl.lI
..... II. GonaIu
Tel: (305) 673-7010 , I=alc (305) 673-778t
OFFICE OF Tl-IE CtTY MANAGER
November 3, 2005
Mr. Paul Webster, Director
United States Department of Housing and Urban Development
Community Planning and Development
Division of Financial Management, Room # 7178
451 ~ Street S.W.
Washington, D.C. 20410
RE: Revised Payment Schedule for $4 milJion Section 108 Loan for Urban Improvements
(B-94-MC-12-oD14).
Dear Mr. Webster:
Per discussions with my staff in June 2005, the City of Miami Beach is requesting to revise
the repayment sdledule for the balance of funds from our Section 108 Loan for Urban
Improvements. To date, $1,705,000 of the $4 million loan has been repaid through 2005.
The current repayment schedule is as follows:
Year Payment
Amount
2001 $ 305,000
2002 $ 320.000
2003 $ 340,000
2004 S 360 000
2005 S 380.000
2006 $ 405.000
2007 $ 430.000
2008 S 455.000
2009 S 490.000
2010 $ 515.000
Total $4.000,000
To date, the following payments have been made in accordance WIth the current schedule:
Year Payment
'Amount
2001 $ 305 000
2002 $ 320,000
2003 $ 340.000
2004 $ 360.000
2005 S 380.000
Total $1,705.000
/
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/
03/15/20l;}5
14:13
CEC a::M"1 DEl) DHJ -t 913056(.:'iard
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Request for Revised Payment Schedule of the Section 108 Loan
Page2of2
We are proposing a new repayment schedule as follows:
Year Payment
Amount
2001 $ 305 000
2002 !$ 320 000
2003 $ 340,000
2004 $ 360.000
2005 $ 380.000
2006 S 405.000
2007 $ 210.000
2008 S 210.000
2009 S 210.000
2010 S 210,000
2011 $ 210,000
2012 $ 210,000
2013 $ 210,000
2014 S 210,000
2015 $ 210,000
Total $ 4,000 000
We look forward to your favorable approval of our request to amend the payment schedule
on our Section 108 Loan.
If you need additional information, please contact John Quade at (305) 613-7260.
COn:tIaIIy,
J:.:L~
JMG\jq
Hilda M. Fernandez. Assistant City Manager
Patricia Walker, Chief Financial Officer
VIVian Guzman, Director, Neighborhood Services Department
Shebra Simms, Financial Analyst. U.S. Department of HUD
USa Bustamante, CPO Representative, U.S. Department of HUD
F;WElG\Hsc..cc>uahtt\SIiCT-108\FlIlal RequeGt far ReIII&ed Pa)mant Sdledule of Lo8n CM.doc
WIt life t:tlI1Imitted /Q prt'NfrJlno exoefIent pu/JIiC SOtVkri ~ saIirty to all who ifI;e, wolt; 9n(/ play ill 0f.Ir ~ ttopicaJ. hi6totic
CDmmlIIIIfY.
NO.430 f}21
,/
CITY OF MIAMI BEACH .
CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139
www.miamibeachfl.gov
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To:
From:
Subject:
COMMISSION MEMORANDUM
Mayor David Dermer and
Members of the City Commission
Date: July 27,2005
Jorge M. Gonzalez \ ~~
City Manager 0 ... - 0
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, ADOPTING THE CITY'S ONE-YEAR
ACTION PLAN FOR FEDERAL FUNDS FOR FISCAL YEAR 2005/2006,
WHICH INCLUDES THE BUDGETS FOR THE COMMUNITY
DEVELOPMENT BLOCK GRANT (CDBG) PROGRAM AND THE HOME
INVESTMENT PARTNERSHIPS (HOME) PROGRAM; AUTHORIZING THE
CITY MANAGER TO MAKE MINOR NON-8UBST ANTIVE CHANGES TO
THE ONE-YEAR ACTION PLAN OR RESULTING AGREEMENTS
BEFORE EXECUTION WHICH MAY BE IDENTIFIED DURING THE
FINALIZATION AND/OR REVIEW PROCESS, AND WHICH DO NOT
AFFECT THE PURPOSE, SCOPE, APPROVED BUDGET AND/OR INTENT
OF THE PLAN; AUTHORIZING THE CITY MANAGER TO EXECUTE ALL
APPLICABLE DOCUMENTS AND SUBMIT THE ONE-YEAR ACTION
PLAN TO THE U.S. DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT (HUD); FURTHER AUTHORIZING THE MAYOR AND
CITY CLERK TO EXECUTE AGREEMENTS WITH PROVIDERS OF
ACTIVITIES AS FOLLOWS: TWENTY -FIVE (25) CDBG SUB-RECIPIENT
AGREEMENTS, AND TWO (2) CDBG INTERDEPARTMENTAL
MEMORANDA OF UNDERSTANDING; AND AUTHORIZING THE
APPROPRIATION OF ALL FEDERAL FUNDS WHEN RECEIVED.
ADMINISTRATIVE RECOMMENDATION
Adopt the Resolution.
ANALYSIS
The City of Miami Beach is an entitlement city under the U.S. Department of Housing and
Urban Development (HUD). As an entitlement city, the City receives annual allocations of
federal funding under HUD's grant programs. These grant programs are: the Community
Development Block Grant (CDBG) program and the HOME Investment Partnerships
Program (HOME).
For fiscal year 2005/2006, the City expects to receive a total of $3,241,292 in federal
grants from HUD as follows: $2,002,924 in CDBG program funds and $1.238,368 in
HOME funds. In addition, $401,393 in prior year unspent CDBG funds are being
reprogrammed for projects in fiscal year 2005/2006.
As a requirement to receive HUO funds, the City must submit an annual action plan which
outlines its housing and non-housing community development needs, priorities, and
proposed uses of funds for the ensuing program year (FY 2005/2006). The Action Plan
follows the strategies outlined in the Five-Year Consolidated Plan that was approved by the
City Commission on July 30, 2003.
For 31 years, the City has used COBG funds to create viable urban neighborhoods for low
and moderate-income residents by providing affordable housing, revitalizing
neighborhoods, and expanding economic opportunities. COBG funds have also been used
to improve parks, youth centers, playgrounds and neighborhood facilities; to support a
multitude of agencies that provide necessary public services to the community; rehabilitate
and preserve the housing stock; and to create and maintain affordable homeownership
opportunities for low to moderate-income residents of Miami Beach.
In preparing the One-Year Action Plan for FY 2005/2006, the Administration followed all
applicable HUD rules and guidelines. On February 1, 2005, the Administration issued a
Request for Proposals for 2005/2006 funds with a submission deadline of March 2, 2005.
A pre-development public hearing was held on March 15, 2005. On June 1, 2005, the
Administration met with the Community Oevelopment Advisory Committee (CDAC) to
discuss and approve funding recommendations for the FY 2005/2006 Action Plan, which
are detailed in Exhibit 1.
A draft of this Plan was made available to the public for a 30-day comment period
commencing June 20,2005 and ending July 20,2005. A public hearing to hear public
comments was held on June 14, 2005. There were only two generic comments regarding
the availability of local housing for affordable housing development as well as the overall
escalating cost of housing and constructionlrehabilitation costs associated with affordable
housing development. Exhibit 1 also includes the list of all proposed CDBG activities. Most
of the activities described in the One-Year Action Plan will take place in HUD designated
community development target areas. These target areas contain census tract/block
groups that display evidence of a greater than 51 % of households with incomes at or below
80% of the median income and continue to be a priority for allocation of resources. The
northern and southern portions of the City also contain the largest number of the multi-
family structures that require rehabilitation and have the highest concentrations of income-
eligible families.
The City received 41 proposals for the COBG program totaling $4,944,159 and the total
entitlement amount available including recaptured funds is $2,404,317 ($2,002,924
entitlement plus $401,393 prior years unspent funds) not including anticipated program
income. As in previous years, the total amounts requested far exceeded the amount of
funds available. After deducting $525,550 (20%), which includes 20% of the upcoming
entitlement year ($400,585), and 20% of the actual program income of the prior entitlement
year ($124,965) for necessary administrative and operational expenses to implement and
monitor the CDBG program, there was $1,878,767 available for eligible CDBG activities, a
difference of $3,065,392 between funds available and grant requests. The CDSG
entitlement amount of $2,002,924 for FY 2005/06, is a decrease from the previous year
allocation of $2,118,000 and is a 5.4% decrease. Due to previous reductions in the
amount of COBG entitlement funds received by the City of Miami Beach, the staffing levels
were reduced from 10 full-time positions to 7 full-time positions during the current 2004/05
fiscal year. If at the end of the Fiscal Year there are unspent administration funds, that
amount will be added to the next funding year hard cost money to be distributed in the next
year RFP process. Since the administration funds are part of the hard cost allocation, the
amount of funds set aside for Public Services (a maximum of 15% of entitlement funding)
is not affected by the amount of the funds set aside for Administration.
Each year, CDAC and the Administration must make the very difficult decision regarding
which agencies to fund and at what funding levels to award. There is a tremendous
amount of need in the community and very worthwhile proposals but there is a finite
amount of funds available to address every need and program. The consensus
recommendations are consistent with the priority needs areas as identified by the
Commission, the community and the Consolidated Plan. The main priorities include those
activities assisting youth, AIDS/HIV, homelessness, affordable housing, and the elderly.
Agencies that have been awarded funding in the 2005/06 Action Plan are strong
performers with proven track records of success and results which was taken into
consideration during the proposal review process.
Written proposals are reviewed by the Administration and CDAC and ranked according to
their impact on the Consolidated Plan, the number of low to moderate-income individuals
assisted, soundness of project design and ability to achieve objectives in a timely manner,
adequacy of organizational staffing, and leveraging of other non-CDBG resources. All
responsive agencies make presentations of their proposals before the Administration and
CDAC. This allows CDAC and staff to obtain additional information about the
organizations and provides a forum to ask questions about their abilities to undertake and
complete their activities. All of this information is analyzed and utilized to make consensus
funding recommendations of CDAC and the Administration which are incorporated into FY
. 2005/2006 Action Plan, which are detailed in Exhibit 1.
Geographic Distribution of FY 2005-2006 CDBG
Funds
South
Citywide
Middle
32% North Beach Activities
20% South Beach Activities
3% Middle Beach Activities
45% Citywide Activities
The graph bellows illustrates the breakdown of FY 2005/06 COBG funding to eligible
categories of recipient types that will receive funding during the program year:
Adm Inlstratlon
Categories of
2005/06 COSG
Funds
Youth
Homeless
Affordable Housing
Section 108 Loan
21.72% Youth
4.33% Health/HIV-AIDS
11.54% Elderly
0.62% Homeless
0.20% General
19.76% Affordable Housing
16.84% Section 108 Loan
3.33% Code Enforcement
21.66% Administration
The Administration has been working with HUO to restructure the Section 108 Loan
Principal repayment schedule in order to reduce the annual amount of COBG funds that
are currently being used to repay the $ 4 million loan. Additionally, the City is exploring the
possibility of using another funding source to pay down the loan. This will allow more of the
annual COBG entitlement funding to be distributed to the various organizations that are
providing various housing and community development services and activities to our low to
moderate-income citizens. The current repayment schedule is as follows:
Year Principal Principal Paid Remaining
Payment to Date Principal to be
Amount Paid
2001 $ 305,000 $ 305,000
2002 $ 320,000 $ 320,000
2003 $ 340,000 $ 340,000
2004 $ 360,000 $ 360,000
2005 $ 380,000 $ 380,000
2006 $ 405,000 $ 405,000
2007 $ 430,000 $ 430,000
2008 $ 455,000 $ 455,000
2009 $ 490,000 $ 490,000
2010 $ 515,000 $ 515000
Total $4,000,000 $1,705.000 $ 2,295,000
If the Section 108 Loan restructure is pursued and approved by HUO, the proposed
repayment schedule would be as follows:
Year Principal
Payment
Amount
2001 $ 305,000
2002 $ 320,000
2003 $ 340,000
2004 $ 360,000
2005 $ 380,000
2006 $ 230,000
2007 $ 230,000
2008 $ 230,000
2009 $ 230,000
2010 $ 230,000
2011 $ 230,000
2012 $ 230,000
2013 $ 230,000
2014 $ 230,000
2015 $ 225,000
Total $ 4,000,000
Under the HUD 108 Loan restructure scenario, the term of the loan would be extended an
additional 5 years and reduces the average annual repayment amount by approximately
50%. If approved, the revised Section 108 Loan Principal amount will be reduced in FY
2005/06 from $405,000 to $230,000, resulting in $175,000 of additional CDSG funds that
will become available. At that time, alternate "bricks and mortar" projects will be identified
to receive these reprogrammed funds and the One-Year Action Plan for FY 2005/06 will be
amended accordingly. Any recaptured funds from rest~qturing the Section 108 Loan can
not be used for public services. ,~\JjLl ~~ vet-. ,rpb (07
Approval of a restructured loan can not be achieved until after the date that the City must
certify its one year action plan to HUD. In the event repayment or fund recapture can be
accomplished, subsequent Commission review and action will be requested. IN JWO'VlJ/\J6 1'X1
~1'((,t\l rt.-Itr' fW{J(lfAJrl~.
Approval of the One-Year Action Plan is required by the City Commission in order to meet
the August 16, 2005 submission deadline to HUD. Per HUD guidelines, the City Manager
is the designated agent for all formula grants, and executes the grant applications, grant
agreements and other applicable HUD documents. The Housing and Community
Development Division coordinates the planning, preparation, submission, fiscal and
program compliance of the Action Plan.
CONCLUSION
The Administration recommends that the Mayor and City Commission approve the
attached resolution adopting the City's One-Year Action Plan for Federal Funds for Fiscal
Year 2005/2006.
JMGJRCMNPGlTUljfq
T:\AGENDAI2OO5\JuJ2705\RegulaMctlon Plan Memo 2005-2006.doc
CITY OF MIAMI BEACH
COMMISSION ITEM SUMMARY
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Condensed Title:
A Resolution adopting the One-Year Action Plan for Federal Funds for Fiscal Year 2005/06 for the
Community Development Block Grant (CDBG) Program and the HOME Investment Partnerships Program
(HOME) and appropriating funds when received.
Issue:
Should the City of Miami Beach adopt the One-Year Action Plan and submit to the U.S. Department of
Housing and Urban Development (HUD) for approval to receive federal funds; execute the contracts with
providers as outlined in the Plan; and authorize the appropriation of funds when received.
Item Summary/Recommendation:
For FY 05/06, the City expects to receive a total of $3,241,292 in federal grants from HUD as follows:
$2,002,924 in CDBG Program funds and $1,238,368 in HOME funds. In addition, $401,393 in prior year
unspent CDBG funds are being reprogrammed for projects in FY 05/06. Forty-one written proposals were
reviewed by the Administration and CDAC and ranked according to their impact on the Consolidated Plan,
the number of low to moderate-income individuals assisted, soundness of project design and ability to
achieve objectives in a timely manner. As in previous years, the total amounts requested far exceeded the
amount of funds available.
As a HUD requirement to receive HUD funds, the City must submit an annual action plan which outlines its
housing and non-housing community development needs, priorities, and proposed uses of funds for the
ensuing program year, FY 05/06. The City's Action Plan follows the strategies outlined in the Five-Year
Consolidated Plan approved by the City Commission on July 30, 2003.
In preparing the Action Plan, staff worked with the Community Development Advisory Committee (CDAC),
and the community in order to identify community development and housing needs in Miami Beach. The
Action Plan is the culmination of a citizen participation process that included residents, community-based
organizations, CDAC, staff and the Administration.
Financial Information:
Source of
Funds:
~
L:J
Finance Dept.
Ci Clerk's Office Le islative Trackin :
Vivian P. Guzman
DATE
RESOLUTION NO. 2005-25974
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, ADOPTING THE CITY'S ONE-YEAR
ACTION PLAN FOR FEDERAL FUNDS FOR FISCAL YEAR 2005/2006,
WHICH INCLUDES THE. BUDGETS FOR THE COMMUNITY
DEVELOPMENT BLOCK GRANT (CDBG) PROGRAM AND THE HOME
INVESTMENT PARTNERSHIPS (HOME) PROGRAM; AUTHORIZING THE
CITY MANAGER TO MAKE MINOR NON-SUBSTANTIVE CHANGES TO
THE ONE-YEAR ACTION PLAN OR RESULTING AGREEMENTS
BEFORE EXECUTION WHICH MAY BE IDENTIFIED DURING THE
FINALIZATION AND/OR REVIEW PROCESS, AND WHICH DO NOT
AFFECT THE PURPOSE, SCOPE, APPROVED BUDGET AND/OR INTENT
OF THE PLAN; AUTHORIZING THE CITY MANAGER TO EXECUTE ALL
APPLICABLE DOCUMENTS AND SUBMIT THE ONE-YEAR ACTION
PLAN TO THE U.S. DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT (HUD); FURTHER AUTHORIZING THE MAYOR AND
CITY CLERK TO EXECUTE AGREEMENTS WITH PROVIDERS OF
ACTIVITIES AS FOLLOWS: TWENTY-FIVE (25) CDBG SUB-RECIPIENT
AGREEMENTS, AND TWO ~) CDBG INTERDEPARTMENTAL
MEMORANDA OF UNDERSTANDING; AND AUTHORIZING THE
APPROPRIATION OF ALL FEDERAL FUNDS WHEN RECEIVED.
WHEREAS, the One Year Action Plan for Federal funds is a requirement under the
United States Department of Housing and Urban Development (HUD) formula grant
programs which include the Community Development Block Grant (CDBG) program and
the Home Investment Partnerships (HOME) program; and
WHEREAS, the One Year Action Plan for Federal funds for Fiscal Year 2005/06
serves as both a planning document and as an annual application for the formula grant
programs; and
WHEREAS, the City anticipates it will receive a total of $3,241,292 in Federal grants
from HUD for Fiscal Year 2005/06 as follows: $2,002,924 in CDBG funds, and $1,238,368
in HOME funds; and
WHEREAS, a comprehensive planning phase was initiated by the City on February
1, 2005, with the issuance of a Request for Proposals for housing and community
development activities; and
WHEREAS, a public hearing was held on March 15, 2005, with the Community
Development Advisory Committee (CDAC), to obtain citizen input on determining the
priorities and needs for housing and community development; and
WHEREAS, a draft of the One-Year Action Plan for Federal funds for Fiscal Year
2005/06 was made available for a thirty (30) day public review and comment period from
June 20, 2005 to July 20, 2005; and
WHEREAS, on June 1, 2005, the Administration, together with the Community
Development Advisory Committee (CDAC), unanimously approved funding
recommendations for the proposed CDBG-funded activities for the One-Year Action Plan
and for HOME-funded activities, to foster affordable housing as listed in Exhibit 1 of this
Resolution; and
WHEREAS, the One Year Action Plan must be submitted to HUD no later than
August 16,2005;and
WHEREAS, the City Manager is the HUD designated agent for all the formula
grants, and should thereby be authorized to execute the grant applications, the grant
agreements, and other applicable HUD documents.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City
Commission adopt the City's One-Year Action Plan for Federal funds for Fiscal Year
2005/06, which includes the budgets for the Community Development Block Grant (CDBG)
Program and the HOME Investment Partnerships (HOME) Program; authorize the City
Manager to make minor non-substantive changes to the One-Year Action Plan or resulting
Agreements before execution which may be identified during the finalization and/or review
process, and which do not affect the purpose, scope, approved budget and/or intent of the
Plan; authorize the City Manager to execute all applicable documents and submit the One-
Year Action Plan to the U.S. Department of Housing and Urban Development (HUD);
further authorize the Mayor and City Clerk to execute all Agreements with providers of
activities as follows: twenty-five (25) CDBG sub-recipient Agreements, and two (2) CDBG
Interdepartmental Memoranda of Understanding; and autho . e the appropriation of all
federal funds when received.
PASSED and ADOPTED this 27th day of July ,2005.
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... ATTE~~: ~~ f Dvl,~
. CITY: CLERK Robert Parcher
F:\NEIG~D\JoitNICOIoMSSION\2005oOllAcTloH ~ REBO 2005.01 7.200S.DOC
APPROVED AS TO
FORM & LANGUAGE
&FOR CUTION
1-I\t;oS-
Date
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u.s. DEPARTMENT OF HOUSING AND URBAN DEVELoPMENT
COftRACT 1")R LOU GUARAll'rBB ASSISTU'CE tJHDEll
SB~IOR 108 01' DE BOUSIlfG JUm CCHlltDllTY DEVBLoPIIEHT ACT
01' 1974, AS AlGHDJID, 42 V.s.c. S5308
SEP 2 8 am
DA~ of Contrac~
This Contract for Loan Guarantee Assistance ("Contract") is
entered into between the CITY 01' IIIAIII BEACH, PLOlUDA as
Sorrower (the "Borrower"), and the Secretary of Housing and Orban
Development ("Secretary"), as guarantor for the Guarantee made
pur$uant to section 108 ("Section 108") of title I of the Housing
and Community Development Act of 1974, as amended (the 'fActW') and
24' CFR Part 570, Subpart M, of the promissory note executed
contemporaneously herewith and numbered a-i4-HC-12-001C, in the
Maximum Commitment Amount of $4,000,000, and any amended note or
note issued in substitution for such note and having the same
note number (the "Note"). The funds paid or credited to the
account of the Borrower pursuant to the Note are referred to
herein as the "Guaranteed Loan Funds. ,. The Note (including the
fiscal Agency Agreement and the Trust Agreement as defined in
Section I.A. of the Note QnQ incorporated therein) is hereby
incorporated into the Contract. Terms used in the Contract with
initiQl capital letters and not otherwise defined in the text
hereof shall have the respective meanings given thereto in the
Note. The Fiscal Agency Agreement and the Trust Agreement are
same~imes collectively referred to herein as the ~Fiscal
Agency/Trust Agreements," and the Fiscal Agent and the Trustee
respectively are sometimes COllectively referred to as the
qFiscal Agent/Trustee.N
PART I
A. 'lb. Hote: Advances and Recorda. The Note provides that
Advances and ConverSion Date Advances shall be made
thereunder upon the written request of the Borrower and the
approval of the Secretary, pursuant to this ContrQct and the
Fiscal Agency Agreement. The Commitment Schedule attached to
the Note represents the principal repayment schedule for the
Maximum Commitment Amount of the Note. At all times, the
total amount of all Advances and ConverSion Date Advances
under the Note for all Principal Due Dates shall not exceed
the Maximum Commitment Amount of the Note. Prior to the
Conversion Date (as defined in the Note, Section I.A,), the
total amount of Advances made by the Holder for each
Principal Due Date under the Note shall not exceed the
applicable Commitment Amount for such Principal Oue Date set
forth in the Commitment SChe:Ule of the Note. Prior to ~ ~
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03/15/2006
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NO. 430
Conversion Date, the Borrower agrees that the Fiscal Agent
pursuant to the fiscal Agency Agreement shall record the date
and amount of each payment and Advance under the Note and
shall maintain the books and records of all Advances and
Conversion Date Advances for each Principal Due Pate,
interest rates on Advances, payments, and Principal Amounts
outstanding for each Principal Due Date. On and after the
Conversion Date, the Borrower agrees that the Trustee
pursuant to the Trust Agreement will' maintain the books and
records of all payments on the Note and all Principal Amounts
and interest ra~es on such PrinCipal Amounts (each as to be
set forth on Schedule P&I to the Note). No advances of any
kind may be made on the Note after its Conversion Date.
B. Borrower's Requests for .Advance.. All requests for Advances
or Conyersion Date Advances by the Borrower under the Note
shall: be in writing; specify the amount of the Advance
requested; identify the Note by Borrower, number and Maximum
Commitment Amount; be addressed to the Secretary at the
address for notices specified in pa~a9raph 12(f) of this
Contract; be signed by an authorized official of the
Borrower; and otherWise be in the form prescribed by HUD.
Advances and Conversion Date Advances shall be requested and
will only be approved and made in increments of not less than
$1,000 for any Principal Due Date. A request for an initial
Advance under a Note, or a request for a Conversion Date
Advance, ahall be received by the Secretary at lea3t ten
Business Days prior to the BorrowerFs proposed Funding Date
or Conversion Date, as applicable. All other requests for
Advances shall be received by the Secretary not less than
five Business Days prior to the proposed Funding Date. The
Borrower may not deliver a Note or a request for an Advance
or Conversion Date Advance to the Secretary more than two
calendar months prior to the Borrower's proposed Funding
Date. At least t~o Business DaY8 prior to the proposed
Funding Date .or Conversion Date if the Borrower's reque8t was
timely received, or the next available Funding Date for which
the request was timely received, the Secretary shall, except
as otherwise provided in paragraph ll(c) or 12 hereof,
deliver a corresponding Authorization Order or Advance Order
(as applicable) to the Fiscal Agent in accordance with
Section 2.03 or 2.04 of the Fiscal Agency Agreement for the
applicable Funding Date or Conversion Date. rf the Borrower
requests an Advance or Conversion Date Advance of less than
the outstanding Maximum Commitment Amount under the Note, the
.Borrower may also specify in its written request the amount
of the Advance or Conversion Date Advance to be allocated to
each Commdtment Amount or Principal Amount per Principal Due
Date under the Note. If the Borrower does not specify how the
Ad~ance or Conversion Date Advance should be allocated amo:q~~.
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Commitment Amounts/Principal Due Dates, the Borrower hereby
authorizes the Secretary to direct the Fiscal Agent to
allocate the Advance to the re3pective Commitment Amounts or
Principal Amount3 in order of the earliest Principal Due
Date (a) .
c. CoQyo;r:a.i.cm; "lie Of';foJ:.ing. On the Converoion Date (if
any), trust certificates backed by the Note (and similar
notes issued by other Section 108 borro~ers) will be
purchased for a purchase price of the full principal amount
thereof by underwriters selected by the Secretary (the
"Underwriters") pursuant to an Underwriting Agreement between
the Underwriters and the Secretary, at a closing on such
Conversion Date as determined by the Secretary and the
Underwriters. The Borrower ayrees that the interest rate at
which the trust certificate of a specified maturity is sold
to the Underwriters shall govern the interest rate inserted
on the Conversion Date in Schedule P&I of the Note for the
Principal Amount of corresponding maturity.
D. COA8onta. By execution of this Contract, the Borrower
ratifies and consents to the Secretary's selection of the
Underwriters and authorizes the Secre~ary to negotiate with
the Underwriters the terms of the Underwriting Agreement and
of the public offering of interests in the trust certificates
to investors (including the applicable interest rates). In
addition, by execution hereof the Borrower ratifies and
consents to the Secretary's selection of the Fiscal
Agent/Trustee and agrees to the respective terms of the
Fiscal Agency/Trust Agreements. If Advances have been made in
the Maximum Commitment Amount of the Note not less than ten
Business Days prior to the proposed Conversion Date, or if
the Borrower requests a Convexsion Date Advance, the Boxrower
authorizes the Secretary to deliver Schedule P&I to the Note
completed in accordance herewith to the Fiscal Agent/Trustee
on the Conversion Date in accordance with the"Fiscal
Aqency/Tru5t ^9reements, concurrent with delivery of the
Secretary's Guarantee of the trust certificates at the
closing on the Conversion Date, and thereafter the Note shall
be enforceable in acCordance with its terms including
Schedule P&I. In addition, the Secretary reserves the right
to notify the Borrower not less than one calendar month in
advance of a specified Conversion Date that the Note will be
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sold to the Underwriters on such date, if the Secretary in
hi~ 30le di~cretion deter:mine~ that market conditions or
program needs require the participation in the proposed
public offering of all or substantially all Borrowers with
outstanding Advances.
PAR\' IX
1. Receipt, Depoai t aDd Use of Guarant:eed Loan I'wlda.
(a) Except for funds deducted on the Conversion Date
pursuant to paragraph 4{b) and fees and charges deducted by
~be Fiscal Agent/Trustee pursuant to paragraph 4(a), the
Guaranteed Loan Fund~ shall be electronically transferred in
accordance with the Borrower's instructions for deposit in a
separate, identifiable cUstodial aCCOunt: (the "Guaranteed
Loan Funds Account") with a financial institution whose
deposits or accounts are Federally insured. The Guaranteed
Loan Funds Account shall be established and designated as
prescribed in the attached form document entitled "Letter
Agreement for Section 108 Loan Guarantee Program Custodial
Account" (Attaeh~llt 1) and shall be continuouSly maintained
for the Guaranteed toan Funds. Such Letter Agreement must be
executed when the Guaranteed Loan Funds Account is
established. (A fully executed copy of such Letter Agreement
shall be ~ubmitted to the. Secretary within thirty days of its
execution. )
The Borrower shall make withdrawals from said account only
for payment of the costs of approved Section 109 activities,
for transfer to the Loan Repayment Account or for the
temporary investment of funds pursuant to this paragraph
l(a). Such temporary investment of funds into the Guaranteed
Loan Funds Investment Account shall be required within three
Business Days after the balance of depOSited fund3 exceeds
the amount of the Federal depo~it in~urance on the Guaranteed
Loan Funds Account, At that time, any balance of funds in
the Guaranteed Loan Funds Account exceeding such insurance
coverage shall be fully (100\> and continuously invested in
Government Obligations, as defined in paragraph 10 hereof,
held in the Guaranteed Loan Funds Investment Account.
All temporary investments. whether or not required as above,
shall be limited to Government Obligations having maturities
that are consistent with the cash requirements of the
approved activities. In no event shall the investments mature
on or after -ove.ber 1, 2001, or have maturities which exceed
one year. All such investments shall be held in trust for the
benefit of the Secretary by the above financial institution
4
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in an account (the "Guaranteed Loan Funds Investment
Account") established and designated as prescribed in the
. attached form document entitled "Letter Agreement tor Section
108 Loan Guarantee Program Custodial Investment Account"
(A~tacbment 2), which account shall be maintained for all
Government Obligations purchased with funds from the
GUd~Qnteed Loan Funds Account. The Guaranteed Loan Funds
Investment Account need only be established if and when the
Borrower is required to invest, or otherwise invests, the
Guaranteed Loan Funds in Government Obligations. Such Letter
Agree~nt must be executed when the Guaranteed Loan Funds
Investment Account is established. (A fully executed copy of
such Letter Agreement ahall be submitted to the Secretary
within thirty days of its execution.) All proceeds and income
derived trom such investments shall be returned to the
Guaranteed Loan Funds Account.
All funds in the Guaranteed Loan Funds Account or the
Guaranteed Loan Funds Investment Account must be ~ithdrawn
and disbursed by the Borrower for approved activities by
~ 1. 2001. Any funds remaining in either Account after
this date shall be immediately transferred to the Loan
Repayment Account established pursuant to paragraph 6 of this
Contract.
(b) T~e Borrower shall by the fifteenth day of each month
provide the Secretary with a written statement showing the
balance of funds in the Guaranteed Loan Funds Account and the
withdrawals from such account during the preceding calendar
month, and a statement identifying the obligations and their
assignments in the Guaranteed Loan Funds Investment Account.
(e) Upon the Secretary giving notice that the Borrower is in
Default under this Contract or the Note, all right, title,
and interest of the Borrower in and to the Guaranteed Loan
Funds and Guaranteed Loan Funds Investment Accounts shall
immediately vest in the Secretary for use in making payment
on the Note, purchase of Government Obligations in accordance
with paragraph 10, or payment of any other obligations of the
Borrower under this Contract or the Fiscal Aqency/Trust
Agreements. .
2. P.ymen~ Due on Bote. The Borrower shall pay to the Fiscal
Agent/Trustee, as collection agent for the Note, all amounts
due pursuant to the terms of the Note, In accordance with the
Note and the Fiscal Agency/Trust Agreements, payment shall be
made by 3:00 P.M. (New 10rk City time) on the se~enth
Business Day (the "Note Payment DateN) preceding the relevan~
Interest Due Date or frincipal Due Date (each as defined in
the Note), If any Note Payment Date falls on a day that is
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not a Business Day, then the required payment shall be made
on the next Business Day. Payment may be made by check or
wire transfer.
3. Seloction of Rew Fiscal Agent or Tzustee. The Secretary
shall select a new Fiscal Agent or Trustee if the Fiscal
Agent or Trustee resigns or is removed by the Secretary. The
Borrower hereby consents in advance to any suah selection and
to any changes in the Fiscal Agency/Trust Agreements agreed
to by any Fiscal Agent or Trustee and the Secretary, subject
to paragraph 4(e) of this Contract.
4. l"ayaeft" Due l"a.aoa1 Agen'" O~ 2~u.toee; Doc;:umon-t. to 'tAe
S.Cl~.'taxy.
(a) The Borrower agrees to pay the fees of the Fiscal Agent
as required by Exhibit G to the Fiscal Agency Agreement, and
any additional amounts that may be due pursuant to Section
6.01 of the Fiscal Agency Agreement. If not paid by the
Borrower by any other means prior thereto, the Borrower
agrees that any such fees or additional amounts that have
been incurred prior to an Advance or a Conversion Date
Advance may be deducted by the Fiscal Agent/Trustee from the
proceeds of the Advance or Conversion Date Advance, as
applicable.
(b) The Borrower agrees to pay the Borrower's share, as
determined by the Secretary, of the customary and usual
issuance, underwriting, and other costs related to the public
offering and future administration ot the No~e and the trust
certificates, as approved by the Secretary, including the
cost of reimbursement and/or compensation of the Trustee
pureuant to the TrUst Agreement, including Sections 3.11 and
7.01 thereof. In connection with the public offering on the
Conversion Pate, such payment shall either be made by wire
transfer to the Trustee on the day prior to the Conversion
Date or shall be deducted from the Guaranteed Loan Funds on
the Conversion Date.
(c) The Borrower shall submdt to the Secretary not later than
ten Business Days prior to the Funding Date for the initial
Advance hereunder, or if not eubmitted earlier, prior to any
Conversion Date or Public Offering Date applicable to the
Note, thi3 executed Contract, the executed Note, a request
for an Advance or a Conversion Date Advance (as applicable)
in proper form, and an opinion acceptable to the Secretary
from the Borrower's counsel to the effect that: (i) the
govern~ng body of the Borrower has authorized by resolution
or ordinance, in accord~nce with applicable State and local
law, the issuance of the Note and the execution of this
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Contract; (il) the Note and this Contract are valid, binding,
and enforceable obligations of the Borrower; (iii) the pledge
of funds pursuant to 24 CFR 570.705(b) (2) and paragraph Sea)
of this Contract is valid and binding; and (iv) there is no
outstanding litigation that will affect the validity of the
Note or this Contract. In addition, the Borrower shall submit
any other additiona1 docUments or opinions .specifically
required by this Contract (e.g., paragraph S(c), or paragraph
15, !! seq.), at the time required thereby.
(d) The Borrower agrees to reimburse the Underwriters upon
demand by the Secretary for the Borrower's share, as
determined by the Secretary, of all reasonab1e out-at-pocket
expenses (including reasonable fees and disbursements of
counsel) incurred in connection with a proposed public
offering; if the Underwriters incur such additional costs for
the public offering because of any refusal, inability, or
failure on the part of the Borrower timely to submit in
acceptable form any document required by this.Contract
(including paragraph 4(c)), or because of any withdrawal by
the Borrower from the public offering, after the Borrower has
submitted a request tor a Conversion Date Advance hereunder.
By execution and delivery of this Contract to the Secretary,
the Borrower hereby expressly authorizes the Secretary to pay
amounts due under this paragraph from funds p1edged under
paragraph Sea) of this Contract.
(e) The undertakings in paragraphs 3 and 4 of this Contract
are expressly subject to the requirement that the Fiscal
Aqency/Trust Agreements shall in no event require payment of
fees or charges, reimbursement of expenses, or any
indemnification by the Borrower trom any source other than
funds pledged pursuant to paragraphs 5 or 15 et ~ of this
Contract.
5. Se~i~y. The Borrower hereby pledges as security for
repayment of the Note, and such other charges as may be
authorized in this Contract, the following:
(a) All allocations or grants which have been made or for
which the Borrower may become eligible under Section 106 of
the Act, as well as any grants which are or may become
available to the Borrower pursuant to Section l08(q).
(b) Program income, as defined at 24 eFR 570.S00Ca) (or any
successor regulation), directly generated from the use of the
Guaranteed Loan Funds.
(0) Other security as desc~ibed in paragraph 15, et seq.
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(d) All proceeds (including insurance and condemnation
proceeds) from any of the foregoing.
(e) All funds or investments in the accounts established
pursuant to paragraphs 1 and 6 of this Contract.
6. LoaD Repayaent AcOOlUat,
(al All amounts pledged pursuant to paragraphs 5(b), 5(c),
and 5(d) of this Contract shall be deposited immediately on
receipt in a separate identifiable custodial account (the
-Loan Repayment Account") with a financial institution whose
deposits or accounts are Federally insured. The Loan
Repayment Account shall be established and designated as
prescribed in the attached fo~ document entitled "Letter
Aqreement for Section 108 Loan Guarantee Program Custodial
Account". (A~~chmeDt~) and shall be maintained for such
pledged funds. The Loan Repayment Account need only be
established if and when the Borrower receives amounts pledged
pursuant to paragraph 5(b), 5(e) or Sed). Such Letter
Agreement must be executed when the Loan Repayment Account 15
established. (A fully executed copy of such Letter Agreement
shall be submdtted to the Secretary wi~hin thirty days of its
execution.) Borrower shall make withdrawals from said account
only for the purpose of paying interest and principal due on
the Note (including the purchase of Government Obligations in
accordance with paragraph 10 hereof), for payment of any
other obligation of the Borrower under this Contract or the
Fiscal Agency/Trust Agreements, or for the temporary
investment of funds pursuant to this paragraph, until final
payment and discharge of the indebtedness evidenced by the
Note, unless other~ise expressly-authorized by the Secretary
in writing. Such temporary inve3tment of funds shall be
required within three BU5ines5 Days after the balance of
deposited funds exceeds the amount of the Federal deposit
insurance on the Loan Repayment ACcount. At that time, the
balance of funds in the Loan Repayment Account exceeding such
insurance coverage shall be fully (100%) and continuously
invested in Government Obligations, as defined in paragraph
10 hereof. .
All temporary investments, whether or not required as above,
shall be limited to Government Obligations having maturities
that are consistent with cash requirements for payment of
principal and interest as required under the Note. In no
event shall the maturities of such investments exceed one
year. All such investments shall be held in trust for the
benefit of the Secretary by the above financial institution
in an account (the "Loan Repayment Investment Accountfl)
established and designated as prescribed in the attached for
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document entitled "Letter Agreement for Section 108 Loan
Guarantee Program Custodial Investment Account" (Attachment
2), which account shall be maintained for all Government
Obtiqations purchased with funds from the Loan Repayment
Account. Such Letter Agreement must be executed when the Loan
Repayment Inve~tment Account i~ established. (A fully
executed copy of such Letter Agreement shall he submitted to
the secretary within thirty days of its execution.) All
proceeds and income derived from such investments shall be
returned to the Loan Repayment Account.
(b) Borrower shall by the fifteenth day of each month,
provide the Secretary with a written statement showing the
balance of fund& in the Loan Repayment Account and the
depOSits and. Withdrawals of all funds in such account during
the preceding calendar month and a statement identifying the
obligations and their assignments in the Loan Repayment
Investment Account.
(c) Upon the Secretary giving notice that the Borrower i5 in
Default under this Contract or the Note, all right, title,
and interest of the Borrower in and to tne Loan Repayment and
Loan Repayment Investment Accounts shall immediately vest in
the Secretary for use in making payment on the Note, purchase
of Government Obligations in accordance with paragraph 10, or
payment of any other obligation of the Borrower under this
Contract or the Fiscal AgencY/Trust Aqreements.
7. Use of CDBG or BOX I'Imds for llepa]'aeDt. Any funds avai.lable to
the Borrower under Section 106 of the Act (including program
income deri~ed therefrom) are authorized to be used by the
Borrower for payments due on the Note, Optional Redemption (as
defined in the Note), payment of any other obligation of the
Borrower under this Contract or the Fiscal Agency/Trust
Aqreements, or the purchase of Government Obligations in
accordance with paragraph 10. Any funds specifically available
to the Borrower for such payments or as a debt service reserve
under an EDI Grant Agreement pursuant to Section l08(q) of the
Act which supports the eligible project(a) and activities
financed by the Note may al~o be used therefor; any other u~e of
Section l08(q) fund~ for such purposes ahall require the prior
written approval of the Secretary. Unless otherwise
specifically provided herein or unless otherwise expressly
authorized by the Secretary in writing, the Borrower shall
substantially disburse funds available in the toan Repayment ~
the Loan Repayment Investment Accounts before funds from grants
under Section 106 of the Act are withdrawn from the O.S. .
Treasury for such purposes.
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8 . sem:etary's Right to Mesu:i.ct Use o~ CDBG Funds to RepaYJaent.
Upon a determination by the Secretary that payments required by
paragraph 2 and/or paragraph 4 of this Contract are unlikely to
be made as specified, the Secretary may give the Borrower notice
that the availability to the Borrower of funds pledged under
paragraph S(a) of this Contract for purposes other than
satisfaction of the pledge is being restricted. This restriction
shall be in an amount estimated by the Secretary to be
sufficient to ensure that the payments referred to in paragraph
2 and/or paragraph 4 hereof are made when due. This restriction
may be given effect by conditioning the restricted amounts to
prohibit disbursement for purposes other than satisfaction of
the pledge at the time Buch restricted funds are approved as
grants, by limiting the Borrower's ability to draw down or
expend the restricted funds for other purposes, and by
disapproving payment requests submitted with respect to such
grants for purposes other than satisfaction of the pledge.
9, SO~~' 8 Right to U.e Pledged Punda foz: Repaymeu't. The
Secretary may use funds pledged under paragraph Seal of this
Contract or funds restricted under grants pursuant to paragraph
a of this Contract to make any payment required of the Borro~er
under paragraph 2 and/or paragraph 4, if such payment has not
been timely made by the Borrower.
10. DefeaaaaC8. For purposes of this Contract, after the Conversion
Date the Note shall be deemed to have been paid (defeased) if
there shall have been deposited with the Trustee either moneys
or Government Obligations (as defined below), which in the sole
determination of the Secretary, mature and bear interest at
times and 1n amounts sufficient, together with any other moneys
on deposit with the Trustee for such purpose, to pay when due
the principal and interest to become due on the Note. The
Aggregate Principal Amount of the Note or any unpaid Principal
Amount may be so defeased, in whole or in part, as of any
Principal Due Date. In accordance with the Note and the Trust
Agreement, the Borrower shall give timely notice and written
instruction& to the Secretary and the Trustee concerning any
principal amounts proposed to be defeased, including any
Optional Redemptions proposed, which instructions shall be
approved by the Secretary. If the unpaid Aggregate Principal
Amount of the Note guaranteed pursuant to this Contract shall'be
defeased and deemed to have been paid in full, then the Borrower
shall be released from all agreements, covenants, and further
obligations under the Note.
"Government Obligation- means a direct obligation of, or any
obligation for which the full and timely payment of principal
and interest is guaranteed by, the United States of America,
,
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including but not limited to, United States Treasury
Certificates ~f Indebtedness, Notes and Bonds - State and Local
Government Series or certificates of ownership of the principal
of or interest on direct obligations of, or obligations
unconditionally guaranteed by, the United States of America,
which obligations are held in trust by a commercial bank which
is a member of the Federal Reserve System and has capital and
surplus (exclusive of undivided profits) in excess of
$100,000,000.
11. De~aul~- (a) A Default under the Note and this Contract
shall occur upon failure by the Borrower to:
(i) pay when due an installment of principal or interest
on the Note; or (ii) punctually and properly perfor.m,
observe, and comply with any covenant, aqreementl or
condition contained in: (A) this Contract, (B) any
security aqree~nt, deed of tru~t, mortgage, assignment,
guarantee, Or other contract securing payment of
indebtedness evidenced by the Note, or (e) any future
amendments, modifications, restatements, renewals, or
extensions of any such documents.
(b) The Borrower waives notice of Default and opportunity
for hearing with respect to a Default under paragraph ll(a).
(C) In addition to Defaults under paragraph 11(a)1 the
Secretary may deClare the Note in Default if the Secretary
makes a final decision in accordance with the provisions of
section 111 of the Act and 24 CFR 570.913 (or any successor
provisions), including requirements for reasonable notice and
opportunity for hearing, that the Borrower has failed to
comply substantially with title I of the Act.
Notwithstanding any other provision, following the giving of
such reasonable notice, the Secretary may, in the Secretary's
sole discretion pending the Secretary's final decision,
~ithhold the guarantee of any or all obligations not yet
guaranteed on behalf of the Borrower under outstanding
commitments, suspend approval of any further Advances or
Conversion Date Advances under the Note, and/or direct the
Borrower's financial institution to: refuse to honor any
instruments drawn upon, or withdrawals from, the Guaranteed
Loan Funds Account or the Loan Repayment Account initiated by
the Borrower, and/or refuse to release obligations and
assignments by the Borro~er from the Guaranteed Loan Funds
Investment Account or the Loan Repayment I~vestment Account.
12. 9~.1 Ac~ODa. Upon a Default or declaration of Oefault
under this Contract, the Secretary may, in the Secretary's sole
discretion, take any or all of the following remedial actions'
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(a) With any lunds or security pledged under this Contract, the
Secretary may (i) continue to make payments due on the Note,
(ii) make a prepayment under Section I.D. of the Note or make an
acceleration payment with respect to the principal amount of the
Note subject to Optional Redemption as prOVided in Section III
of the Hate, (iii) purchase Government Obligations in accordance
with paragraph 10 of this Contract, (iv) pay any interest due
tor late payment as provided in the Note, this Contract, or the
Fiscal Agency/Trust Agreements, (v) pay any other obligation of
the Borrower under this Contract or the Fiscal Agency/Trust
Agreements, and/or (vi) pay any reasonable expenses incurred by
the Secretary or the Fiscal Agent/Trustee as result of the
Borrower's Default.
(b) The Secretary may withhold the guarantee of any or all
obligations not yet guaranteed or the disbursement of any or all
grants not yet disbursed in full under outstanding guarantee
commitments or grant approva13 for the Borrower under Sections
108 and/or 106 of the Act.
(cl The Secretary may wiehhold approval of any or all further
Advances or Conversion Date Advances under the Note (if
applicable); direct the Borrower's financial institution to
refuse to: honor any instruments drawn upon, Or withdrawals
from, the Guaranteed Loan Funds Account or the Loan Repayment
Account by the Borrower, and/or to release obligations and
assignments by the Borrower from che Guaranteed Loan Funds
Investment Account or the Loan Repayment Investment hccount;
and/or direct tbe Borrower and/or the Borrower's financial
institution to transfer remaining balances from the Guaranteed
Loan Funds Account to the Loan Repayment Account.
(d) Until the Conversion Pate, or with respect to amounts
subject to Optional Redemption, the Secretary may accelerate the
Note.
(e) The secretary may exercise any other appropriate remedies
or sanctions available by law or regulation applicable to the
assistance provided under this Contract, or may institute any
other action available under law to recover Guaranteed Loan
Funds or to reimburse the Secretary for any payment under the
Secretary's Guarantee or any reasonable expenses incurred by the
Secretary as a result of the Default.
(f) All notices and submissions provided for hereunder shall be
in writing (including by telex, telecopier or any other form of
facsimile communication) and mailed or sent or delivered, as to
each party hereto, at its address set forth below or at such
other address as shall be designated by such party in a ~ritten
notice to the other party hereto. All such notices and other
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communications shall be effective when received as follows; (i)
if sent by band delivery, upon delivery; (ii) if sent by mail.
upon the earlier of tbe date of receipt or five Business Days
after deposit in the maill postage prepaid; (iii) if sent by
telex, upon receipt by the sender of an answer back; and (iv) if
sent by telecopier, upon receipt.
The Secretary:
U.S. Dept. of Housing and Urban Development
Actencion: Paul Webster. Director
f1n4~ci~l ~anaaement Division
451 7th Street. SW, Room 7180
Washinaton. DC 20410
BorrQWI;;l.:: :
136 L~ted Liab11ity. Notwithstanding any other provision of this
Contractr the Fiscal Agency/Trust Agreements or the Note, any
recovery against the Borrower for any liability for amounts due
pursuant to the Note, the tiscal Agency/Trust Agreements or this
Contract shall be limited to the Source5 of security pledged in
paragraph 5 or any Special Conditions of this Contract. Neither
the general credit nor the taxing power of the Borrowerr or of
the State in which the Borrower is located, is pledged for any
payment due under the Note, the Contract, or the Fiscal
Agency/Trust Agreements.
14. %aoo~.ted Gran~ A4r.eaen~. The Contract and the Note are
hereby incorporated in and made a part of the Grant Agreement
authorized by the Secretary on ~~ 10, 1995 under the Funding
Approval for grant n~er B-9C-MC-l -OOlC to the Borrower. In
carrying out activities with the Guaranteed Loan Funds
hereunder, the Borrower agrees to comply with the Act and 24 CFR
Part 570, as provided in Subpart M thereof.
15 . Special COftClt t:i.ona IUld Jfoc:1i.f.i.ca ticms :
(a) Paragraph 5(c) of the contract is amended by deleting
paragraph as written in its entirety and substituting
therefor the following:
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-(e) 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(b) 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 'City Security Agreement.),
which City Security Agreement shall be in a form
acceptable to the Secretary. 1f
(b) Guaranteed Loan Funds $ballbe used by tbe Borrower to
finance site improvements pursuant to S570.703(f) and
construct a public facility pursuant to 5570.703(1) the
combined results of which will be the creation of four
hundred and eighty-five (485) jobs) which will primarily
benefit low and moderate income persons.
(i) In order to secure the payment and performance of the
secured obligations of the Borrower, the Borrower
shall provide the following collateral (collectively,
the -Collateral"):
(A)' The pledge of resort tax increment revenue
assessed by the city against hotel rooms which
hotel tu revenue is described in Attachment 3
hereof (the "Hotel Tax Revenue") and pledged
pursuant to an agreement (the If Pledge of Local
Resort Tax Revenue "Agreement.) which Agreement
.shall described notel Tax Revenue that
represents the one-third portion of the one-half
of the additional 1% of Resort Tax levied by
the City against hotel rooms in the City of
Miami Beach. The Pledge of Local Resort Tax
Revenue Agreement shall be in a form acceptable
to the Secretary.
(8 ) 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 (12) above
that the Secretary in hie 801e 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 ftNotice of Inadequate
secur1ey.n The Debt Service Reserve shall
established in an amount determined by an
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1716
independent,financial advisor acceptable to the
Secretary (the RFinancial AdvisorN) in
accordance with a methodology acceptable to the
Secretary. The Debt Service Reserve shall be
fully (100%) and continuously invested in
Government Obligations, aa defined in paragraph
10 hereof, which investments shall be held in
trust for the benefit of the Secretary in the
Guaranteed Loan Fwlds Investment Account as
provided in paragraph 6 (a) hereof. Grant.s
pledged pursuant to paragraph Sea) 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 epecified above acceptable evidence
that the Debt Service Reserve has heen
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 maincained in
an amount consistent .ith an amortization
schedule developed by the Financial Advisor and
approved by the Secretary.
Iii} The Borrower shall select a financial institution
acceptable to the Secretary (the .CUstodian") to act
as custodian for the documents specified in (iii)
below (hereinafter referred to as the .Security
Documents"). The Borrower and the Custodian shall
enter into a written agreement containing such
provisions as t.he Secretary deems necessary. A
executed copy of such agreement, with original
signatures, shall be forwarded to the Secretary
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~17
contemporaneoualy with the delivery of document a
pursuant to (iii) below.
(iii) Not later than fifteen business days after the
initial disbursement of the Guaranteed Loan Funds,
the norrower shall deliver to the CUstodian the
following:
(A) The original Pledge of Local Hotel Tax Revenue
Agreement in a form accepcable to the Secretary.
(B) An opinion of the Borrower's counsel, addressed
to the Secretary and on its letterhead, that:
the Pledge of Local Hotel Tax Revenue Agreement
has been duly executed, and is a valid and
binding obligation of the Borrower, enforceable
in accordance with its terms.
(0) Paragraph 12 is amended by adding at the end thereof the
following language:
Cd)
"(g) The Secretary may exercise or enforce any and all
other rights or remedies {including any and all rights and
remedies available hy law or agreement (including any of
the Security Doouments, as defined in paragraph 15(b))
against the Collateral, against the Borrower, or against
any other person or property."
The Borrower shall deliver concurrently with the Notes an
opinion of its counsel, addressed to the Secretary and on
its letterhead. that the Borrower has provided the
Secretary with a'perfected security interest in the other
security specified in paragraph 5(c) hereof through public
notice or opera.tion of law.
All notices and submissions provided for hereunder shall
be in writing (including by telex. telecopier or any other
form of telecommunication) and mailed or sent or
delivered, as to each party hereto, at its address set
forth in 12ff} above or at such other address as shall be
designated by such party in a written notice to the other
party hereto. All such notices and other c01lltnunications
shall be effective when received as followa: (i) if sent
by hand delivery, upon delivery; (ii) if sent by mail,
upon the earlier of the date of receipt or five Business
Days after deposit in the mail, postage prepaid; (iii) if
sent by telex. upon receipt by the sender of an answer
back; and (iv) if sent by telecopier. upon receipt.
(e)
16
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[;118
(g) The Economic Development lnitiat:ive (EDI) Grant Agreement,
dated , for the grant made to the Unit
of General Local Government pursuant to Section l08(q)J
under grant number B-92-ED-12-0014, is hereby incorporated
in the Contract and made a part hereof.
[Rest of page intentionally left blank)
r"
17
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[;J19
,.
XR WZTRBSS WBBaBOr, the undersigned, as authorized officials on
behalf of the Borrower or the Secretary, have executed this Contract
for Loan Guarantee Assistance, which shall be effective as of the
date of execution hereof on behalf of the Secretary.
AftBS~:
eIft 01' IIDIa alACK, rLOllIDA
BOaROIiR
Robert Parcher
(.me)
Bt; Neisen O. Kasdin
(Hue)
City Clerk
(1'iUe)
-~f~~
Mayor
ITiJ!J
(S' e)
(Date)
APPIOVEO AS TO
FOIM & lANGUAGe
& FOR acECul10N
SBCaIrlAaY OP BOVSIWG AND UlUWf
D.2VBLOPMIDr.r
~ i4t-
BY: Jeff Ruster
.lfaae)
Deputy Assistant ~ecretary
for Economic Davalo ment
le)/
SEP 28 mJ
( ate)
~
18
1J;if)