HomeMy WebLinkAboutRS4- Economic Development ECONOMIC DEVELOPMENT AGENCY 4J
OF THE CITY OF SAN BERNARDINO
REQUEST FOR COMMISSION/COUNCIL ACTION
FROM: RONALD E.WINKLER SUBJECT: DOWNTOWN CINEMA
Development Director PROJECT
DATE: June 12, 1998
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Synopsis of Previous Commission/Council/Committee Action(s):
On February 17, 1997,the Mayor and Common Council approved an application to the U.S.Department of Housing
and Urban Development(HUD)for a Section 108 Loan in the amount of$7,000,000 to assist in development of the
cinema.
Synopsis Continued to Next Page...
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Recommended Motion(s):
(Mayor and Common Council)
MOTION A: RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO,CALIFORNIA APPROVING THE CONTRACT FOR LOAN GUARANTEE
ASSISTANCE UNDER SECTION 108 OF THE HOUSING AND COMMUNITY
DEVELOPMENT ACT OF 1974,AS AMENDED,42 U.S.C.SECTION 5308(CDBG SECTION
108 CONTRACT NO.B-96-MC-06-0539)FOR THE CINEMA STAR MULTI-PLEX THEATER
PROJECT(CENTRAL CITY NORTH REDEVELOPMENT PROJECT)
(Motion(s)Continued to Next Page...
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Contact Person(s): Ronald E.Winkler/ Phone: 5081
Project Area(s): Central City North(CCN) Ward(s): One(1)
Supporting Data Attached:❑x Staff Report D Resolution(s)EI Agreement(s)/Contract(s)❑ Map(s) ❑Ltr/Memo
FUNDING REQUIREMENTS: Amount: $9,989,000 Source: Loan&Bond Proceeds,Section 108
Budget Authority: Requested
SIGNATURE: Y'-K' 4 Z 4&
Ronald E.Winkler,Director
Development
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Commission/Council Notes:
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REW:Iag:06-15-Ol.cdc.doc COMMISSION MEETING AGENDA
MEETING DATE:06/15/19998
' Agenda Item Number: 'c
Request for Commission/Council Action
Downtown Cinema Project
June 8, 1998
Page Number-2-
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Synopsis of Previous/Commission/Council/Committee Action(s):
On November 4, 1996,the Community Development Commission conducts a public hearing to consider approval of a
Disposition and Development Agreement(DDA)with MDA-San Bernardino Associates L.L.C.,for development of a
20 to 22 screen cinema complex. The developer indicates a commitment from Cinema Star Luxury Theaters,Inc.,to
operate the cinema under a lease agreement. The DDA is approved by the Commission.
On February 5, 1996,the Community Development Commission authorizes a 180 day extension to the Exclusive Right
to Negotiate.
On July 10, 1995,the Community Development Commission authorizes execution of an Exclusive Right to Negotiate
Agreement for 180 days.
On June 22, 1995,the Redevelopment Committee recommends an Exclusive Right to Negotiate be granted to
Metropolitan Development.
In May 1995,the Economic Development Agency issues a Request for Qualifications(RFQ)to 100 developers and
operators soliciting interest in developing a cinema complex. Agency staff also promoted the development opportunity
at the annual International Conference of Shopping Centers(ICSC).
Recommended Motion(s):
(Community Development Commission)
MOTION B: RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN
BERNARDINO APPROVING THE CONTRACT FOR LOAN GUARANTEE ASSISTANCE
UNDER SECTION 108 OF THE HOUSING AND URBAN DEVELOPMENT ACT OF 1974,AS
AMENDED,42 U.S.C.SECTION 5308(CDBG SECTION 108 CONTRACT NO.B-96-MC-06-0539)
FOR THE CINEMA STAR MULTI-PLEX THEATER PROJECT;ACCEPTING THE EVIDENCE
OF FINANCING COMMITMENTS SUBMITTED BY MDA-SAN BERNARDINO ASSOCIATES,
L.L.C.,RELATING TO THE CINEMA STAR MULTI-PLEX THEATER PROJECT;APPROVING
THE 1998 COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM SECTION 108 PROJECT
DEVELOPMENT LOAN AGREEMENT(CINEMA STAR MULTI-PLEX THEATER PROJECT)
BY AND BETWEEN MDA-SAN BERNARDINO ASSOCIATES AND THE REDEVELOPMENT
AGENCY OF THE CITY OF SAN BERNARDINO;APPROVING THE TRANSFER OF TITLE TO
MDA-SAN BERNARDINO ASSOCIATES OF THE THEATER PARCEL AND THE COMMON
AREA PARCEL(TENTATIVE PARCEL MAP NO. 15038),APPROVING THE AGREEMENTS
RELATING TO TRANSFER OF TITLE IN THE THEATER PARCEL AND THE COMMON AREA
PARCEL PURSUANT TO THE DISPOSITION AND DEVELOPMENT AGREEMENT DATED AS
OF OCTOBER 29,1996 BY AND BETWEEN MDA-SAN BERNARDINO ASSOCIATES AND THE
AGENCY, AND AUTHORIZING CERTAIN OTHER ACTIONS RELATING TO SUCH
TRANSFER OF LAND AND DISBURSEMENT OF PROCEEDS OF THE FUNDS NECESSARY
TO CONSTRUCT AND DEVELOP THE CINEMA STAR MULTI-PLEX THEATER PROJECT
(CENTRAL CITY NORTH REDEVELOPMENT PROJECT)
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REW:Iag:06-15-0I.cdc.doc COMMISSION MEETING AGENDA
MEETING DATE:06/15/19998
Agenda Item Number: C�
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
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Downtown Cinema Project
As you know, staff has been working with Agency Special Counsel, consultants and
representatives of Metropolitan Development to finalize documents for construction financing of
the Cinema Project. The documents before you today are a culmination of that work. They
include:
1. Contract for Loan Guarantee Assistance under Section 108 of the Housing and
Community Development Act of 1974, as amended.
This is the basic loan agreement between the U.S. Department of Housing and Urban
Development (HUD), the City and Redevelopment Agency as designated public agency
borrower. Terms of the agreement govern release of$7.0 Million in Section 108 loan
funds by HUD to the Redevelopment Agency for the Cinema Project. Proceeds of the
Section 108 loan satisfy one of several Agency financed obligations under the DDA. The
$7.0 Million Section 108 loan will be repaid by the Redevelopment Agency to HUD with
principal and interest.
Fully amortized over a 20 year period at an estimated 7%per annum average interest.
The Redevelopment Agency will in turn use the proceeds of the $7.0 Million Section 108
loan obtain from HUD to loan the developer the sum of$7.0 Million for the construction
of the Cinema Project. The Redevelopment Agency will loan Section 108 funds to the
developer pursuant to the separate loan agreement described below under the heading "3.
1998 Community Development Block Grant Program .......".Repayment for the Section
108 loan to HUD is an obligation of the Agency derived from lease payment from
CinemaStar Luxury Theaters, Inc. The lease itself is for 25 years with two five (5) year
options and backed by personal guarantees of key corporate officers of CinemaStar
Theaters. Further, loan security is provided to HUD by(i) a note and second deed for
trust on the real property and theater improvement including fixtures and equipment, (ii)
allocation or grants available to the City under Section 106 of the Act; (iii) proceeds from
insurance, completion bonds or condemnation awards; and(iv) such other security as
available.
2. Contract for Loan Guarantee Assistance Section 108 Loan Repayment --Promissory
Notes
Nineteen(19) separate promissory notes are to be executed between the Redevelopment
Agency and HUD and each will be separately dated on disbursement of Section 108 loan
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REW:lag:06-15-0Lcdc.doc COMMISSION MEETING AGENDA
MEETING DATE:06/15/1998
Agenda Item Number:
Economic Development Agency Staff Report
Downtown Cinema Project
June 8, 1998
Page Number-2-
funds occurs. Each Section 108 Promissory Note bears a separate maturity date for a
different amount of principal. In turn, the notes will be retired over time from loan
repayment income received by the Agency from the developer. It should be noted, that
HUD will use these notes together with similar security instruments from other loans
throughout the nation to back a public offering for funding its obligations.
3. 1998 Community Development Block Grant Program Section 108 Project Development
Loan Agreement (CinemaStar Multi-Plex Theater Project)
Proceeds of the Section 108 loan which the Redevelopment Agency obtains from HUD
under Paragraph 1, above are disbursed by the Redevelopment Agency to the developer
(MDA-San Bernardino Associates, LLC) through this agreement for Theater construction
costs. Disbursement and use of loan funds are regulated by terms of this agreement, as are
security requirements. In no event are loan proceeds to exceed $7 million. Further,
should the 108 loan commitment be rescinded by HUD before a draw of funds occurs,
escrow fail to close or no loan funds disbursed for 18 months after close of escrow the
loan agreement shall no longer be effective. Payment of prevailing wages is also required.
Section 5 of the agreement creates a repayment obligation from the developer to the
Agency for loan funds received. Payments are to be made annually according to a
schedule extending to the year 2018. These payments are expected to be made from lease
revenues received from the CinemaStar Theaters to the developer theater operator under
its lease. As noted earlier, the CinemaStar Theater lease is backed by the personal
guarantees of key corporate officers of CinemaStar Theaters. The loan is secured by a
note and second deed of trust which provides for an assignment of lease rents in the event
of developer default.
Following Commission approval, an extensive list of conditions (Section 7.0) must be met
before Section 108 funds can be disbursed to the developer under this agreement. These
items include: (i) HUD confirmation of acceptance of its loan agreement and initial
disbursement of funds by HUD to the Agency under Item 1 above; (ii) complete set of
theater plans and specifications; (iii) GMAC-Mortgage loan documents; (iv) legal opinions
from the developer counsel; (v) tenant estoppel certificate; (vi) required developer funds;
(vii) completion bonds and insurance; etc.; and (viii) Satisfaction of the other conditions of
the DDA for the transfer of fee title in the theater site to the developer. In the event these
conditions are not satisfied the Agency's obligation to fund the loan can terminate subject
to any developer rights to cure defects under terms of the Disposition and Development
Agreement (DDA). All the above and related items shall be subject to a closing review by
staff and Agency counsel as part of the escrow closing under the DDA and will include the
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REW:Iag:06-15-0Lcdc.doc COMMISSION MEETING AGENDA
MEETING DATE:06/15/1998
Agenda Item Number: Zs A
Economic Development Agency Staff Report
Downtown Cinema Project
June 8, 1998
Page Number -3-
developer, CinemaStar Theater, GMAC - Mortgage and the Agency as well as the fiscal
agent (First American Title Company).
Finally, should a developer default occur during construction, the Agency has the right,
but not the obligation, to complete construction. Thus, the Agency has power as Attorney
in fact together with rights to construction and architectural contracts, tenant leases,
developer funds, etc.
4. Fiscal Agent Construction Loan Disbursement Control Agreement
This agreement provides that First American Title Insurance Company shall act as fiscal
agent for receipt and disbursement of construction funds. Terms of the agreement specify
content of applications for a draw of funds and procedures for payment. final payments
shall be subject to architect's certification of completion, installation of FF &E, release of
liens, notices and certificates of occupancy.
5. Common Area Covenants, Conditions and Restrictions for the CinemaStar Theater
Project.
Development of the entire site is divided into five separate parcels. One parcel is for the
Theater building itself. Three other parcels will be devoted to retail use and then there is a
common area parcel which integrates the improvement, use and maintenance of the
Theater parcel within the retail parcels.
The development and integrated operation of the parcels will be controlled by this
document. It provides for ingress and egress to common areas, access and drainage
easements, assessments for common area maintenance, imposes limits on granting of
future easements, etc.
The CC&R's also prohibit certain uses such as distillation, vehicle sales, pool hall,
mortuary, school or educational facility, church, industrial, car wash, etc. Also, building
height restrictions are imposed to maintain design integrity together with defined common
area improvements and maintenance. Insurance requirements are established and
provisions made for replacement of common area improvements in the event of
destruction.
It should be noted that although title to the theater parcel common area parcel will be
conveyed to the developer at the time of funding of the construction financing at close of
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REW:1ag:06-15-01.cdc.doc COMMISSION MEETING AGENDA
MEETING DATE:06/15//11998
' Agenda Item Number: 12-5
Economic Development Agency Staff Report
Downtown Cinema Project
June 8, 1998
Page Number 4-
the escrow under the DDA, the Agency retains title to the retail parcels under the DDA
until the developer attains 50%prelease commitment and construction financing for the
improvement of the retail parcels. Should the developer be unable to satisfy these
requirements the Agency may seek others to develop the retail parcels subject to the
CC&R's. Approval of the CC&R's satisfy another condition of the DDA.
6. Parking Agreement
An Agreement between the Redevelopment Agency and MDA-San Bernardino
Associates, LLC for the provision of parking. Under the agreement, the Agency is to
provide up to 1700 peak hour and 1,100 non-peak hour spaces within a 1600 foot radius
of the Theater project site on a non-exclusive basis. At this time, 2223 public spaces have
been identified (excluding use of the State Office Building parking structure) as being
within a 1600 foot radius of the Theater project site. However, included in this count is
curb side parking on public streets in the area.
Parking is to be provided free of charge to patrons of the Theater parcel and the retail
parcels. However, the developer will charge theater operator and retail tenants 75¢ per
square foot annually payable to the Agency to offset the cost of maintaining the availability
of such parking. This charge is subject to annual cost of living adjustments.
The obligation to maintain this level of parking spaces in the vicinity of the Theater project .
site extends for a period of 65 years. However, during the term of the parking
commitment, the Agency may change or substitute specific existing parking improvements
so long as the number of 1,700 peak hour and 1,100 non peak hour parking spaces
remain available within the 1600 foot radius.
7. A letter date June 12, 1998 from GMAC Commercial Mortgage Corporation outlining
terms and conditions under which GMAC Mortgage will provide a$3,600,000
construction loan and permanent financing to the developer. Section 2.17 of the DDA
requires the developer to provide evidence of financing commitments together with
payment of commitment fees. The attached letter has been submitted by the developer for
consideration as fulfillment of this obligation.
Further, staff has been advised that GMAC's loan committee will meet on Wednesday,
June 17, 1998, to consider the loan. Section 2.17d of the DDA requires the developer to
obtain lender approval prior to submitting evidence of financing. Since GMAC's loan
committee approval is pending documents received to date do not satisfy technical
requirements of the DDA. Although the commitment as submitted appears to provide
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REW:1ag:06-15-01.cdc.doc COMMISSION MEETING AGENDA
MEETING DATE:06/15//1199988
Agenda Item Number:
7`_t_
Economic Development Agency Staff Report
Downtown Cinema Project
June 8, 1998
Page Number -5-
satisfactory evidence of construction and permanent financing, none the less a final closing
and transfer of property cannot occur until approval by GMAC's loan Committee.
Furthermore, the Agency must also receive a complete set of GMAC loan documents and
the Development Director must confirm the loan documents are consistent with terms of
the DDA and the HUD Section 108 loan agreements.
The above items and motions are submitted for your consideration.
C�7�/
RONAL E. WINKLER, Director
Development Department
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REW:lag:06-15-01.cdc.doc COMMISSION MEETING AGENDA
MEETING DATE:06/15/1998
Agenda Item Number: 'G
1 COMMUNITY DEVELOPMENT COMMISSION OF THE
CITY OF SAN BERNARDINO
2
3 AGENDA
4 June 15, 1998
5 Item: RESOLUTION OF THE COMMUNITY DEVELOPMENT
COMMISSION OF THE CITY OF SAN BERNARDINO
6 APPROVING THE CONTRACT FOR LOAN GUARANTEE
ASSISTANCE UNDER SECTION 108 OF THE HOUSING
7 AND URBAN DEVELOPMENT ACT OF 1974, AS
AMENDED, 42 U. S .C. SECTION 5308 (CDBG
8 SECTION 108 CONTRACT NO. B-96-MC-06-0539)
FOR THE CINEMA STAR MULTI-PLEX THEATER
9 PROJECT; ACCEPTING THE EVIDENCE OF FINANCING
10 COMMITMENTS SUBMITTED BY MDA-SAN BERNARDINO
ASSOCIATES, L.L.C. , RELATING TO THE CINEMA
11 STAR MULTI-PLEX THEATER PROJECT; APPROVING
THE 1998 COMMUNITY DEVELOPMENT BLOCK GRANT
12 PROGRAM SECTION 108 PROJECT DEVELOPMENT LOAN
AGREEMENT (CINEMA STAR MULTI-PLEX THEATER
13 PROJECT) BY AND BETWEEN MDA-SAN BERNARDINO
ASSOCIATES AND THE REDEVELOPMENT AGENCY OF
14 THE CITY OF SAN BERNARDINO; APPROVING THE
TRANSFER OF TITLE TO MDA-SAN BERNARDINO
15 ASSOCIATES OF THE THEATER PARCEL AND THE
COMMON AREA PARCEL (TENTATIVE PARCEL MAP NO.
16 15038) , APPROVING THE AGREEMENTS RELATING TO
17 TRANSFER OF TITLE IN THE THEATER PARCEL AND
THE COMMON AREA PARCEL PURSUANT TO THE
18 DISPOSITION AND DEVELOPMENT AGREEMENT DATED
AS OF OCTOBER 29, 1996 BY AND BETWEEN MDA-
19 SAN BERNARDINO ASSOCIATES AND THE AGENCY,
AND AUTHORIZING CERTAIN OTHER ACTIONS
20 RELATING TO SUCH TRANSFER OF LAND AND
DISBURSEMENT OF PROCEEDS OF THE FUNDS
21 NECESSARY TO CONSTRUCT AND DEVELOP THE
CINEMA STAR MULTI-PLEX THEATER PROJECT
22 (CENTRAL CITY NORTH REDEVELOPMENT PROJECT)
23 Action to be
Taken: Adopt resolution directing that all actions
24 necessary to complete the transactions
contemplated under the HUD Section 108 Loan
25 Agreement, the Disposition and Development
Agreement and the $7 . OM Agency Loan
26 Agreement are implemented, subject to the
satisfaction of the conditions referenced in
27 the related documents .
28 A certified copy of this Resolution and executed documents to be
returned to Sabo & Green, A Professional Corporation.
I RESOLUTION NO.
2 RESOLUTION OF THE COMMUNITY DEVELOPMENT
COMMISSION OF THE CITY OF SAN BERNARDINO
3 APPROVING THE CONTRACT FOR LOAN GUARANTEE
ASSISTANCE UNDER SECTION 108 OF THE HOUSING
4 AND URBAN DEVELOPMENT ACT OF 1974, AS
AMENDED, 42 U. S .C. SECTION 5308 (CDBG
5 SECTION 108 CONTRACT NO. B-96-MC-06-0539)
FOR THE CINEMA STAR MULTI-PLEX THEATER
6 PROJECT; ACCEPTING THE EVIDENCE OF FINANCING
COMMITMENTS SUBMITTED BY MDA-SAN BERNARDINO
7 ASSOCIATES, L. L.C. , RELATING TO THE CINEMA
8 STAR MULTI-PLEX THEATER PROJECT; APPROVING
THE 1998 COMMUNITY DEVELOPMENT BLOCK GRANT
9 PROGRAM SECTION 108 PROJECT DEVELOPMENT LOAN
AGREEMENT (CINEMA STAR MULTI-PLEX THEATER
10 PROJECT) BY AND BETWEEN MDA-SAN BERNARDINO
ASSOCIATES AND THE REDEVELOPMENT AGENCY OF
11 THE CITY OF SAN BERNARDINO; APPROVING THE
TRANSFER OF TITLE TO MDA-SAN BERNARDINO
12 ASSOCIATES OF THE THEATER PARCEL AND THE
COMMON AREA PARCEL (TENTATIVE PARCEL MAP NO.
13 15038) , APPROVING THE AGREEMENTS RELATING TO
14 TRANSFER OF TITLE IN THE THEATER PARCEL AND
THE COMMON AREA PARCEL PURSUANT TO THE
15 DISPOSITION AND DEVELOPMENT AGREEMENT DATED
AS OF OCTOBER 29, 1996 BY AND BETWEEN MDA-
16 SAN BERNARDINO ASSOCIATES AND THE AGENCY,
AND AUTHORIZING CERTAIN OTHER ACTIONS
17 RELATING TO SUCH TRANSFER OF LAND AND
DISBURSEMENT OF PROCEEDS OF THE FUNDS
18 NECESSARY TO CONSTRUCT AND DEVELOP THE
CINEMA STAR MULTI-PLEX THEATER PROJECT
19 (CENTRAL CITY NORTH REDEVELOPMENT PROJECT)
20
21 WHEREAS, the Community Development Commission of the
22
City of San Bernardino (the "Commission") is the governing board
23
of the Redevelopment Agency of the City of San Bernardino, a body
24
corporate and politic (the "Agency") , organized and existing
25
pursuant to the Community Redevelopment Law (Part 1 of Division
26
24) commencing with Section 33000 of the Health and Safety Code
27
28 of the State of California; and
2 -
I WHEREAS, the Agency has previously entered into a
2 redevelopment agreement with MDA-San Bernardino Associates,
3 L.L.C. , a Delaware limited liability company (the "Developer")
4 entitled "Disposition and Development Agreement, " dated October
5 29, 1996 (the "DDA") which affects certain lands (the "Land")
6 situated in the Central City Redevelopment Project, San
7 Bernardino, California; and
8
9
WHEREAS, the DDA sets forth the terms and conditions on
10
which the Developer may purchase the Land from the Agency for
11
redevelopment and use in accordance with the DDA; and
12
13
14 WHEREAS, as part of the transaction contemplated under
15 the DDA, and subject to the acquisition by the Developer of the
16 "'Theater Parcel" and the "Common Area Parcel, " as these terms are
17 defined in the DDA, the Agency shall make available to the
18 Developer a certain loan of funds pursuant to DDA Section 2 . 03 (a)
19 (the "Agency Loan") in an original principal amount not to exceed
20 Seven Million Dollars ($7, 000, 000 . 00) . The proceeds of the
21 Agency Loan, together with other sources of funds, shall be used
22
and applied by the Developer for the payment of certain costs of
23
the development, construction, improvement and financing of a
24
multi-screen cinema complex and related common area improvements
25
on part of the Land (the "Theater Project") , all as more fully
26
set forth in the DDA; and
27
28
3 -
I WHEREAS, the sole source of funds available to the
2 Agency to provide for the disbursement to the Developer of any
3 sums from the Agency Loan shall be obtained by the Agency under
4 a "Contract for Loan Guarantee Assistance Under Section 108 of
5 the Housing and Community Development Act of 1974, As Amended (42
6 U.S.C. Section 5308) " (the "HUD Section 108 Loan Agreement") by
7 and among the Secretary of the United States Department of
8 Housing and Urban Development ("HUD") , the City of San
9
Bernardino, as the "Unit of Local Government" (the "City") , and
10
the Agency, as the "designated public agency borrower" under the
11
HUD Section 108 Loan Agreement and the related Section 108 Loan
12
Guarantee Program regulations of HUD set forth at 24 C. F.R. Part
13
14 570 . 700, et secr. ; and
15
16 WHEREAS, the City and the Agency have received a
17 letter, and the accompanying documents, from HUD dated March 13,
18 1998 (as modified under a letter from HUD, dated April 1, 1998) ,
19 for a loan guarantee commitment by HUD under Section 108 of
20 the Housing and Community Development Act of 1974, as amended . . .
21 [HUD Section 108 Loan Guarantee Program Grant Number B-96-MC-06-
22
05391 . . . " which authorizes the Agency to obtain a loan under the
23
Section 108 Loan Guarantee Program of HUD in accordance with the
24
terms and conditions of the Section 108 Loan Agreement, in an
25
amount not to exceed $7, 000, 000 . 00 for disbursement by the Agency
26
for the redevelopment of the Land and the development and
27
28 improvement of the Theater Project by the Developer; and
4 -
I WHEREAS, the Agency shall disburse the proceeds of the
2 HUD Section 108 Loan to the Developer for the construction,
3 improvement and financing of the Theater Project in accordance
4 with the terms and conditions of an agreement entitled, "1998
5 Community Redevelopment Block Grant Program Section 108 Project
6 Development Loan Agreement (Cinema Star Multi-Plex Theater
7 Project) " (the "$7 . OM Agency Loan Agreement") by and between the
8 Developer and the Agency; and
9
10
WHEREAS, the Commission acting as the governing board
11
of the Agency deems it appropriate at this time to approve the
12
13 HUD Section 108 Loan Agreement by and among HUD, the City and the
14 Agency and to authorize the actions related to the Community
15 Development Block Grant funding assistance to be provided to the
16 Agency, as the public agency designee borrower, under the HUD
17 Section 108 Loan Agreement and the corresponding loan of funds to
18 be provided by the Agency to the Developer for the Theater
19 Project pursuant to the $7 . OM Agency Loan Agreement, as set forth
20 in this Resolution.
21
22 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION,
23
ACTING ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF
24
SAN BERNARDINO, DOES HEREBY RESOLVE, DETERMINE AND ORDER AS
25
FOLLOWS :
26
27 Section 1 . The Commission hereby acknowledges the
28 action taken by the Mayor and Common Council relating to the HUD
5 -
1 Section 108 Loan Agreement and the Theater Project in the
2 resolution of even date herewith entitled:
3 "RESOLUTION OF THE MAYOR AND COMMON COUNCIL
OF THE CITY OF SAN BERNARDINO, CALIFORNIA
4 APPROVING THE CONTRACT FOR LOAN GUARANTEE
ASSISTANCE UNDER SECTION 108 OF THE HOUSING
5 AND COMMUNITY DEVELOPMENT ACT OF 1974, AS
AMENDED, 42 U. S .C. SECTION 5308 (CDBG
6 SECTION 108 CONTRACT NO. B-96-MC-06-0539)
7 FOR THE CINEMA STAR MULTI-PLEX THEATER
PROJECT (CENTRAL CITY NORTH REDEVELOPMENT
8 PROJECT) "
9
Section 2 . (a) The Commission hereby acknowledges
10
receipt of a copy of a letter dated June 12, 1998, from GMAC
11
Commercial Mortgage Corporation (herein "GMAC-Mortgage") which
12
contains an outline of the relevant terms and conditions on which
13
14 GMAC-Mortgage is prepared to loan to the Developer a principal
15 amount not to exceed Three Million Six Hundred Thousand Dollars
16 ($3, 600, 000 . 00) for construction financing for the Theater
17 Project . The letter dated June 12, 1998, also contains an
18 outline of the relevant terms and conditions on which GMAC-
19 Mortgage is prepared to provide certain permanent financing to
20 the Developer at the time of completion of the Theater Project in
21 a principal amount not to exceed Three Million Six Hundred
22 Thousand Dollars ($3, 600, 000 . 00) . The Commission hereby finds
23
and determines that pursuant to DDA Section 2 . 17, the letter
24
dated June 12, 1998, from GMAC-Mortgage provides evidence
25
acceptable to the Commission that the Developer has satisfied the
26
27 conditions of DDA Section 2 . 17 (a) and (b) .
28
6 -
I (b) Pursuant to DDA Section 2 . 17 (c) , the Development
2 Director, in consultation with Agency Special Counsel, is hereby
3 authorized and directed to verify that the final form of each of
4 the GMAC-Mortgage loan documents, as presented to the Agency
5 pursuant to Section 7 . 0 (a) (7) of the $7 . OM Agency Loan Agreement,
6 are consistent with the June 12, 1998 letter from GMAC-Mortgage
7 and the applicable terms of the DDA and the loan disbursement
8 procedures of the Agency under the $7 . OM Agency Loan Agreement,
9
and each of the other related Theater Project agreements and
10
instruments identified in Section 6 and Section 7 of this
11
Resolution.
12
13
14 Section 3 . The Commission hereby approves the form
15 of the HUD Section 108 Loan Agreement on file with the Agency
16 Secretary as presented at this meeting. The Chair of the
17 Commission and the Agency Secretary are hereby authorized and
18 directed to execute the HUD Section 108 Loan Agreement on behalf
19 of the Agency, as the designated public agency borrower, together
20 with such technical modifications to the text of paragraph 1 (a)
21 of the HUD Section 108 Loan Agreement as described below in
22 Section 5 (a) of this Resolution and the related promissory notes
23
as described below in Section 5 (b) of this Resolution.
24
25
The Commission hereby approves the form of the Series
26
1997-B Fiscal Agency Agreement by and among The Chase Manhattan
27
28 Bank, a fiscal agent, HUD, and the Agency, as the designated
7 -
I public agency borrower under the HUD Section 108 Loan Agreement
2 on file with the Agency Secretary as presented at this meeting.
3 The Chair of the Commission and the Agency Secretary are hereby
4 authorized and directed to execute the Series 1997-B Fiscal Agent
5 Agreement on behalf of the Agency.
6
7 The Chair of the Commission and the Agency Secretary
8 are further authorized and directed to execute on behalf of the
9
Agency, as the designated public agency borrower under the HUD
10
Section 108 Loan Agreement, all of the related instruments and
11
certificates as may be required by HUD in order to complete the
12
transaction contemplated under the Section 108 Loan Agreement .
13
14
15 Section 4 . (a) Upon the execution of the HUD
16 Section 108 Loan Agreement by the City and the Agency, and the
17 execution by the Agency of all of the related instruments and
18 certificates, the Development Director shall cause the fully
19 executed original copy of the HUD Section 108 Loan Agreement,
20 each of the executed original promissory notes, the Series 1997-B
21 Fiscal Agent Agreement and the other certificates executed by the
22 Agency as the designated public agency borrower to be delivered
23
to HUD as soon as practicable.
24
25
(b) Subject to the satisfaction of all of the
26
conditions to the close of the escrow transaction described in
27
28 Section 7 . 0 (a) (19) of the $7 . OM Agency Loan Agreement (the
8 -
I "Escrow") , the Development Director is hereby directed to cause
2 the appropriate form of a "Request for Advance" under the HUD
3 Section 108 Loan Agreement to be completed and submitted to HUD
4 on behalf of the Agency such that the initial disbursement of
5 funds to the Agency under the HUD Section 108 Loan Agreement in
6 an amount presently estimated not to exceed Five Hundred Thousand
7 Dollars ($500, 000 . 00) , shall be available for release to the
8 Developer at the close of Escrow as the "Initial Advance" to pay
9
"Theater Project Costs", as these terms are defined in the $7 . OM
10
Agency Loan Agreement . After the close of the Escrow, the
11
Development Director is hereby further directed to prepare and
12
submit to HUD on behalf of the Agency, each additional Request
13
14 for Advance under the HUD Section 108 Loan Agreement, such that
15 funds shall be made available to the Agency by HUD for the Agency
16 to make the necessary course of Theater Project construction
17 Advances at the times requested by the Developer under the $7 . OM
18 Agency Loan Agreement .
19
20 (c) The Commission hereby designates each of the
21 following officers of the Agency to execute a Request for Advance
22 under the HUD Section 108 Loan Agreement :
23
24
(i) Chair of the Commission and
25
(ii) Development Director.
26
27
28
9 -
I The signatures of both of the officers of the Agency
2 identified above, shall be required for the valid execution and
3 submittal to HUD of each Request for Advance under the HUD
4 Section 108 Loan Agreement .
5
6 (d) The Development Director is further authorized and
7 directed to initiate all other ministerial actions on behalf of
8 the Agency relating to the delivery to HUD of all related
9
documents, wire fund transfer instructions, account fund balance
10
confirmation reports and the like, as contemplated under the HUD
11
Section 108 Loan Agreement .
12
13
14 Section S . (a) The Commission hereby acknowledges
15 that the scheduled repayments by the Agency to HUD of the
16 principal amount of the HUD Section 108 loan funds to be
17 disbursed to the Agency under the HUD Section 108 Loan Agreement,
18 shall be due and payable in the amounts and at the times provided
19 as follows :
20
Date of Principal Installment of Date of Principal Installment of
21 Installment Principal Due Installment Principal Due
22 August 1, 1998 $180, 000.00 August 1, 2009 $360,000.00
23 August 1, 1999 $190, 000.00 August 1, 2010 $380, 000.00
24 August 1, 2000 $200,000.00 August 1, 2011 $410,000.00
25 August 1, 2001 $220, 000.00 August 1, 2012 $435, 000.00
August 1, 2002 $230, 000.00 August 1, 2013 $460, 000.00
26 August 1, 2003 $250, 000.00 August 1, 2014 $490, 000.00
27 August 1, 2004 $260, 000.00 August 1, 2015 $530, 000.00
28 August 1, 2005 $280, 000.00 August 1, 2016 $560, 000.00
- 10 -
1 August 1, 2006 $300, 000.00 August 1, 2017 $605, 000.00
2 August 1, 2007 $320, 000.00
3 August 1, 2008 $340, 000.00
4
5 The Chair of the Commission and the Agency Secretary
6 are hereby authorized and directed to execute and deliver on
7 behalf of the Agency to the order and instruction of HUD, each of
8
the promissory notes of the Agency as the designated public
9
agency borrower under the terms of the HUD Section 108 Loan
10
Agreement .
11
12
13 The Chair of the Commission and the Agency Secretary,
14 on behalf of the Agency, are further authorized and directed to
15 acknowledge certain adjustments in the dates for the principal
16 Payments by the Agency to HUD due on August 1, 1998 and on August
17 1, 1999, such that the principal sums due on each of these dates
18 may be paid to HUD by the Agency on a new date of August 1, 2017,
19 or such other date as HUD may authorize in writing. Any such
20 adjustment to the dates for the principal payments to HUD of such
21 promissory notes may be acknowledged on behalf of the Agency by
22
an appropriate interlineation by the Chair of the Commission and
23
the Agency Secretary of the text of the applicable HUD Section
24
108 promissory notes .
25
26
27 Payments of accrued interest on the outstanding
28 principal balance of the sums disbursed to the Agency under the
- 11 -
I HUD Section 108 Loan Agreement shall be paid by the Agency at the
2 rates of interest per annum and at the times and in the amounts
3 provided in the HUD Section 108 Loan Agreement .
4
5 (b) The Chair of the Commission and the Agency
6 Secretary, in consultation with the Development Director, are
7 hereby authorized and directed on behalf of the Commission to
8
modify the text of paragraph 1 (a) of the HUD Section 108 Loan
9
Agreement to indicate: (i) that the date in the eighth (8th)
10
sentence of paragraph 1 (a) be changed from "May 1, 1999" to a new
11
12 date of "May 1, 2000; " and (ii) that the date in the thirteenth
13 (13th) sentence of paragraph 1 (a) be changed from "May 1, 1999"
14 to a new date of "May 1, 2000, " or to such other date as HUD may
15 authorize in writing. Such modification to the text of paragraph
16 1 (a) of the HUD Section 108 Loan Agreement may be noted on behalf
17 of the Agency by a written interlineation of the text which has
18 been initialed by the Chair of the Commission and the Agency
19 Secretary.
20
21 Section 6. The Chair of the Commission and the
22
Agency Secretary are hereby authorized and directed to execute on
23
behalf of the Agency the appropriate form(s) of documents
24
necessary to accomplish an assignment to HUD of the "Collateral"
25
26 as this term is described in paragraph 5 (c) of the HUD Section
27
108 Loan Agreement, which provides in relevant part :
28
- 12 -
I " [paragraph 5 (c) of the HUD Section 108 Loan Agreement]
2 (c) Other security:
3 (i) As security for a loan made with the Guaranteed Loan
Funds to the MDA--San Bernardino Associates, L.L.C. ,
4 (the "Obligor") , which loan shall be evidenced by a
promissory note (the "Obligor Note") and a loan
5 agreement (the "Loan Agreement") , which Obligor Note
and Loan Agreement shall be in a form acceptable to the
6 Secretary, the Borrower shall obtain the following
7 collateral (collectively, the "Collateral") :
8 (A) A lien on the real property described in
Attachment 3 hereof (the "Property") , established
9 through an appropriate and properly recorded
mortgage (the "Mortgage") . The Mortgage shall
10 contain such provisions as the Secretary deems
necessary and may be subordinated to another lien
11 on the property not to exceed $3, 600, 000,
provided such subordination is not lower than the
12 second position.
13 (B) Any and all rights, titles, and interests of the
14 Obligor in and to the lease by and between MDA--
San Bernardino Associates, L.L.C. and Cinema Star
15 Luxury Theaters, Inc. (the "Multi-Plex Theater
Lease") presented in Attachment 4 hereof, and the
16 "Guaranty of Lease" presented in Attachment 5
hereof. Such rights, titles, and interests of
17 the Obligor shall be the subject of a collateral
assignment of leases (the "Collateral Assignment
18 of Leases") . The Collateral Assignment of Leases
shall be in a form acceptable to the Secretary.
19
20 (C) Any and all rights, titles, and interests of the
Obligor in and to any licenses, permits, and
21 other agreements covering the Property. Such
rights, titles, and interests shall be the
22 subject of a collateral assignment of interest in
licenses, permits, and other agreements (the
23 "Collateral Assignment of Interest in Licenses,
Permits, and Agreements") . The Collateral
24 Assignment of Interest in Licenses, Permits, and
Agreements shall be in a form acceptable to the
25 Secretary.
26 (D) A security interest (collectively referred to as
_ the "Security Interests") in the fixtures,
2� furniture and equipment described in Attachment 6
28 hereof (the "FF&E") . The security interest shall
be granted pursuant , to an appropriate security
- 13 -
agreement (the "Security Agreement") , which
1 Security Agreement also shall be referenced in
2 appropriate Uniform Commercial Code Financing
Statements filed in accordance with the Uniform
3 Commercial Code. The Security Agreement and such
Uniform Commercial Code Financing Statements
4 shall contain such provisions as the Secretary
deems necessary.
5
(ii) The Borrower shall select a financial institution
6 acceptable to the Secretary (the "Custodian") to
act as custodian for the documents specified in
7 (iii) below. The Borrower and the Custodian
shall enter into a written agreement containing
8 such provisions as the Secretary deems necessary.
A fully executed copy of such agreement, with
9 original signatures, shall be forwarded to the
10 Secretary contemporaneously with the delivery of
documents pursuant to (iii) below.
11
(iii) Not later than five business days after the
12 receipt of the Guaranteed Loan funds, the
Borrower shall deliver to the Custodian the
13 following documents (hereinafter collectively
referred to as the "Security Documents") -
14
(A) The original Obligor Note, endorsed in blank and
15 without recourse .
16 (B) The original Loan Agreement and an assignment
17 thereof, which assignment shall be in a form
acceptable to the Secretary.
18
(C) The original recorded Mortgage signed by the
19 Mortgagor and an assignment thereof, in a
recordable form but unrecorded, which assignment
20 shall be in a form acceptable to the Secretary.
21 (D) The Security Agreement and an assignment thereof,
which assignment shall be in a form acceptable to
22 the Secretary.
23 (E) The original Collateral Assignment of Interest in
24 Leases and an assignment thereof, which
assignment shall be in a form acceptable to the
25 Secretary.
26 (F) The original Collateral Assignment of Interest in
Licenses, Permits, and Agreements and an
27 assignment thereof, which assignment shall be in
a form acceptable to the Secretary.
28
- 14 -
(G) An opinion of Borrower' s counsel, addressed to
1
the Secretary and on its letterhead, that :
2 (1) the Obligor is a limited liability company
3 duly organized, validly existing, and in
good standing under the laws of the state of
4 California .
5 (2) the Obligor Note has been duly executed and
delivered by a party authorized by the
6 Obligor to take such action and is a valid
and binding obligation of the Obligor,
7 enforceable in accordance with its terms,
except as limited by bankruptcy and similar
8 laws affecting creditors generally; and
9 (3) the instruments specified in (B) through (F)
10 above are valid and legally binding
obligations, enforceable in accordance with
11 their respective terms .
12 (H) A mortgage title policy, issued by a company and
in a form acceptable to the Secretary, naming the
13 Borrower as the insured party. The policy must
either include in the definition of the "insured"
14 each successor in ownership of the indebtedness
secured by the Mortgage or be accompanied by an
15 endorsement of the policy to the Secretary.
16 (I) A certified survey with a legal description
17 conforming to the title policy and the Mortgage .
18 (J) An appraisal specifying an estimate of the market
value of the Real Property and FF&E of not less
19 than $13, 500, 000 . The appraisal shall be
completed by an appraiser who is certified by the
20 state and has a professional designation (such as
"SRA" or "MAI") , and shall conform to the
21 standards of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989 ("FIRREA")
22 with the exception that lease-up discounts may be
omitted due to the total development of the
23 Property being pre-leased as a theater to the
24 theater operator. "
25 Section 7 . The Agency hereby approves the following
26 documents and agreements in the form presented at this meeting
27 and on file with the Agency Secretary:
28
- 15 -
I (1) 1998 Community Development Block Grant Program
Section 108 Project Development Loan Agreement
2 (Cinemaster Star Multi-Plex Theater Project) ,
dated as of June 15, 1998
3 Parties : Developer and Agency
4
(2) Fiscal Agent Construction Loan Disbursement
5 Control Agreement, dated June 15, 1998
6 Parties : Developer and
Agency and
7 GMAC-Mortgage and
8 Fiscal Agent (First American Title Company) .
9 (3) Disbursement Control Services Agreement, dated as
of June 15, 1998
10 Parties : Developer;
11 GMAC-Mortgage;
Agency; and
12 Disbursement Control Agent (to be designated
and mutually approved by GMAC-Mortgage and
13 the Agency)
14 (4 ) Common Area Covenants, Conditions and
Restrictions for the Cinemaster Theater Project,
15 dated June 15, 1998
16 Parties : Developer and Agency
17
18 (5) Parking Agreement, dated as of June 15, 1998
19 Parties : Developer and Agency
20 (6) Escrow instructions for coordinating the transfer
of the Theater Parcel and the Common Area Parcel
21 to MDA-San Bernardino Associates under the DDA
and funding of the GMAC-Mortgage Loan and the
22 $7 . OM Agency Loan
23 Parties : Developer;
24 Agency; and
First American Title Insurance Company as
25 escrow holder (FATCO Account No. 73571A)
26
The Chair of the Commission and the Agency Secretary
27
are hereby authorized and directed to execute on behalf of the
28
- 16 -
I Agency, each of the documents referenced in the preceding
2 paragraph of this Resolution, together with such conforming
3 changes to each such document as recommended by the Development
4 Director and Agency Special Counsel, as necessary or appropriate
5 to conform to the requirements of the HUD Section 108 Loan
6 Agreement, the $7 . OM Agency Loan Agreement, the DDA, the GMAC-
7 Mortgage loan documents and the satisfaction of the conditions to
8 close of the Escrow under Section 7 . 0 (a) (1) - (19) , inclusive of
9 the $7 . OM Agency Loan Agreement .
10
11
Section 8 . The Chair of the Commission and the
12
Agency Secretary are hereby authorized and directed to execute
13
the final form of Tentative Parcel Map No. 15038 and the Agency
14
Grant Deed transferring the fee title interest of the Agency in
15
the Theater Parcel and the Common Area Parcel to the Developer,
16
17 on behalf of the Agency, and to cause Tentative Parcel Map No.
18 15038 and the Agency Grant Deed to be recorded as official
19 records of the Office of the Recorder of San Bernardino County,
20 at the close of the Escrow. The Development Director is hereby
21 authorized and directed to coordinate all of the related
22 arrangements by and among the Developer, the Agency and the
23 escrow holder (First American Title Insurance Company) under the
24 Escrow for the completion of the transfer of the fee title
25 contract of the Agency in the Theater Parcel and the Common Area
26
Parcel to the Developer at the close of Escrow.
27
28
- 17 -
I Section 9 . The Development Director is hereby
2 authorized and directed to establish and maintain financial
3 records and accounts for the administration of the disbursements
4 of advances to the Agency under the HUD Section 108 Loan
5 Agreement and the corresponding disbursements of advances to the
6 Developer under the $7 . OM Agency Loan Agreement for the Theater
7 Project as contemplated under the DDA and Section 14 . 0 of the
8 $7 . OM Agency Loan Agreement .
9
10 All payments of principal and interest received by the
11
Agency from the Developer under "Borrower Section 108 Promissory
12
Note, " as this term is described in the $7 . OM Agency Loan
13
Agreement, shall be promptly deposited by the Agency in the "Loan
14
Repayment Account" as this term is described in paragraph 1 (a) of
15
16 the HUD Section 108 Loan Agreement .
17
18 Section 10 . The Agency Special Counsel is hereby
19 authorized and directed to submit to HUD on behalf of the Agency,
20 as the designated public agency borrower and a party to the HUD
21 Section 108 Loan, an approving legal opinion with respect to the
22 transaction contemplated under the HUD Section 108 Loan
23 Agreement, substantially in the form of the applicable "Section
24 108 - Guarantee Loans : Model Legal Opinion for Interim Financing
25
(1997-B) " transmitted by HUD under the cover of its letter dated
26
March 13, 1998, to the City and the Agency as part of the
27
documentation associated with the HUD Section 108 Loan Agreement.
28
- 18 -
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN
1 BERNARDINO APPROVING THE CONTRACT FOR LOAN GUARANTEE ASSISTANCE UNDER SECTION
108 OF THE HOUSING AND URBAN DEVELOPMENT ACT OF 1974, AS AMENDED, 42 U.S.C.
2 SECTION 5308 (CDBG SECTION 106 CONTRACT NO. B-96-MC-06-0539) FOR THE CINEMA
STAR MULTI-PLEX THEATER PROJECT; ACCEPTING THE EVIDENCE OF FINANCING
3 COMMITMENTS SUBMITTED BY MDA-SAN BERNARDINO ASSOCIATES, L.L.C. , RELATING TO
THE CINEMA STAR MULTI-PLEX THEATER PROJECT; APPROVING THE 1998 COMMUNITY
DEVELOPMENT BLOCK GRANT PROGRAM SECTION 108 PROJECT DEVELOPMENT LOAN AGREEMENT
4 (CINEMA STAR MULTI-PLEX THEATER PROJECT) BY AND BETWEEN MDA-SAN BERNARDINO
ASSOCIATES AND THE AGENCY; APPROVING THE TRANSFER OF TITLE TO MDA-SAN
5 BERNARDINO ASSOCIATES OF THE THEATER PARCEL AND THE COMMON AREA PARCEL
(TENTATIVE PARCEL MAP NO. 15038) AND APPROVING THE AGREEMENTS RELATING TO
6 TRANSFER OF TITLE IN THE THEATER PARCEL AND THE COMMON AREA PARCEL PURSUANT
TO THAT CERTAIN DISPOSITION AND DEVELOPMENT AGREEMENT DATED AS OF OCTOBER 29,
7 1996 BY AND BETWEEN MDA-SAN BERNARDINO ASSOCIATES AND THE AGENCY, AND
AUTHORIZING CERTAIN OTHER ACTIONS RELATING TO SUCH TRANSFER OF LAND AND
DISBURSEMENT OF PROCEEDS OF THE FUNDS NECESSARY TO CONSTRUCT AND DEVELOP THE
8 CINEMA STAR MULTI-PLEX THEATER PROJECT TO MDA-SAN BERNARDINO ASSOCIATES
(CENTRAL CITY NORTH REDEVELOPMENT PROJECT)
9
Section 11 . This Resolution shall take effect upon
10
11 the date of its adoption.
12 I HEREBY CERTIFY that the foregoing Resolution was duly
13 adopted by the Community Development Commission of the City of
San Bernardino at a meeting thereof, held on
14 the day of May, 1998, by the following vote, to wit :
15 Council: AYES NAYS ABSTAIN ABSENT
ESTRADA
16 LIEN
ARIAS
17 SCHNETZ
DEVLIN
18 ANDERSON
19 MILLER
20
Secretary
21
The foregoing resolution is hereby approved this
22 day of 1998 .
23 Judith Valles, Chair
Community Development
24 Commission of the
25 City of San Bernardino
26 Approved as to form and legal content:
27 By'
Agency Counsel
28 SBEO/0001/DOC/3343ah
- 19 -
STATE OF CALIFORNIA )
1 COUNTY OF SAN BERNARDINO ) ss
2 CITY OF SAN BERNARDINO )
3 I, Secretary of the Community
Development Commission of the City of San Bernardino, DO HEREBY
4 CERTIFY that the foregoing and attached copy of Community
Development Commission of the City of San Bernardino Resolution
5 No. is a full, true and correct copy of that now on
file in this office .
6
IN WITNESS WHEREOF, I have hereunto set my hand and
7 affixed the official seal of the Community Development Commission
of the City of San Bernardino this day of
8 1998 .
9
10
Secretary of the
11 Community Development Commission
of the City of San Bernardino
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
2
3 MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO
4
5
AGENDA
6
7 June 15, 1998
8
Item: RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
9 CITY OF SAN BERNARDINO, CALIFORNIA APPROVING THE
CONTRACT FOR LOAN GUARANTEE ASSISTANCE UNDER
10 SECTION 108 OF THE HOUSING AND COMMUNITY
DEVELOPMENT ACT OF 1974, AS AMENDED, 42 U. S .C.
11 SECTION 5308 (CDBG SECTION 108 CONTRACT NO. B-96-
MC-06-0539) FOR THE CINEMA STAR MULTI-PLEX
12 THEATER PROJECT (CENTRAL CITY NORTH REDEVELOPMENT
PROJECT)
13
14 Action to be
Taken: Approving the contract for loan guarantee
15 assistance under Section 108 of the Housing and
Community Development Act of 1974, as amended, 42
16 U.S .C. Section 5308 (CDBG Section 108 Contract
No. B-96-MC-06-0539) for the Cinema Star Multi-
17 Plex Theater Project (Central City North
Redevelopment Project)
18
19 Certified copy of Resolution to be returned to Sabo & Green.
20
21
22
23
24
25
26
27
28
- 1 -
1 the DDA, shall be used and applied by the Developer for the
2 payment of certain costs of the development, construction,
3 improvement and financing of a multi-screen cinema complex and
4 related common area improvements on part of the Land (the
5 "Theater Project") , all as more fully set forth in the DDA; and
6
7 WHEREAS, the sole source of funds available to the
8 Agency to provide for the disbursement to the Developer of any
9 sums from the Agency Loan shall be obtained by the Agency under
10 a "Contract for Loan Guarantee Assistance Under Section 108 of
11 the Housing and Community Development Act of 1974, As Amended (42
12 U. S.C. Section 5308) " (the "HUD Section 108 Loan Agreement") by
13 and among the Secretary of the United States Department of
14 Housing and Urban Development ("HUD") , the City of San
15 Bernardino, as the unit of local government (the "City") , and the
16 Agency, as the designated public agency borrower under the HUD
17 Section 108 Loan Agreement and the related Section 108 Loan
18 Guarantee Program regulations of HUD set forth at 24 C. F.R. Part
19 570 . 700, et sec' . ; and
20
21 WHEREAS, the City and the Agency have received a
22 letter, and the accompanying documents, from HUD dated March 13,
23 1998 (as modified under a letter from HUD, dated April 1, 1998) ,
24 for a loan guarantee commitment by HUD under Section 108 of
25 the Housing and Community Development Act of 1974, as amended . . .
26 [HUD Section 108 Loan Guarantee Program Grant Number B-96-MC-06-
27 0539] . . ." which authorizes the Agency to obtain a loan under the
28 Section 108 Loan Guarantee Program of HUD in accordance with the
3 -
1 related to the use and application of HUD Section 108 Loan
2 Guarantee Program funds in an amount not to exceed Seven Million
3 Dollars ($7, 000, 000 . 00) for the Theater Project, and the Mayor
4 and the Common Council have previously authorized the submission
5 by the City and the Agency of an application to HUD for HUD
6 Section 108 Loan Guarantee Program assistance for the Theater
7 Project .
8
9 On June 15, 1998, the Mayor and Common Council conducted a
10 public hearing relating to the use of HUD Section 108 Loan
11 Guarantee Program assistance and funding pursuant to the HUD
12 Section 108 Loan Agreement in an amount not to exceed Seven
13 Million Dollars ($7, 000, 000 . 00) for the Theater Project, and the
14 Mayor and Common Council have considered all comments and
15 information submitted by interested persons in connection with
16 the HUD Section 108 Loan Agreement and the $7 . OM Agency Loan
17 Agreement .
18
19 Section 2 . The Mayor and Common Council hereby
20 approve the form of the HUD Section 108 Loan Agreement on file
21 with the Agency Secretary as presented at this meeting. The
22 Mayor and the City Clerk are hereby authorized and directed to
23 execute the HUD Section 108 Loan Agreement on behalf of the City
24 as the "Unit of General Local Government, " together with such
25 technical modification to the text of paragraph 1 (a) of the HUD
26 Section 108 Loan Agreement as described below in Section 4 (b) of
27 this Resolution.
28
5 -
1 Section 4 . (a) The Mayor and Common Council hereby
2 acknowledge that the scheduled repayments by the Agency to HUD of
3 the principal amount of the HUD Section 108 loan funds as
4 disbursed to the Agency under the HUD Section 108 Loan Agreement,
5 shall be due and payable in the amounts and at the times provided
6 as follows :
7
8 Date of Principal Installment of Date of Principal Installment of
9 Installment Principal Due Installment Principal Due
10 August 1, 1998 $180,000.00 August 1, 2009 $360, 000.00
11 August 1, 1999 $190, 000.00 August 1, 2010 $380, 000.00
12 August 1, 2000 $200,000.00 August 1, 2011 $410, 000.00
13 August 1, 2001 $220,000.00 August 1, 2012 $435, 000.00
14 August 1, 2002 $230, 000.00 August 1, 2013 $460, 000.00
15 August 1, 2003 $250,000.00 August 1, 2014 $490, 000.00
August 1, 2004 $260, 000.00 August 1, 2015 $530, 000.00
16
August 1, 2005 $280, 000.00 August 1, 2016 $560, 000.00
17 August 1, 2006 $300,000.00 August 1, 2017 $605, 000.00
18 August 1, 2007 $320, 000.00
19 August 1, 2008 $340, 000.00
20
21 The Development Director, on behalf of the City, may
22 authorize and acknowledge certain adjustments in the dates for
23 the principal payments by the Agency to HUD due on August 1, 1998
24 and on August 1, 1999, such that the principal sums due on each
25 of these dates may be paid to HUD by the Agency on a new date of
26 August 1, 2018, or such other date as HUD may authorize in
27 writing. Any such adjustment to the dates for the principal
28 payments to HUD of such promissory notes as requested by the
- 7 -
1 108 - Guarantee Loans : Model Legal Opinion for Interim Financing
2 (1997-B) " transmitted by HUD under the cover of its letter dated
3 March 13, 1998, to the City and the Agency as part of the
4 documentation associated with the HUD Section 108 Loan Agreement.
5
6 Section 6. This Resolution shall take effect upon
7 the date of its adoption.
8
9 RESOLUTION OF THE MAYOR AND COMMON COUNCIL
OF THE CITY OF SAN BERNARDINO, CALIFORNIA
10 APPROVING THE CONTRACT FOR LOAN GUARANTEE
ASSISTANCE UNDER SECTION 108 OF THE HOUSING
11 AND COMMUNITY DEVELOPMENT ACT OF 1974, AS
AMENDED, 42 U. S .C. SECTION 5308 (CDBG
12 SECTION 108 CONTRACT NO. B-96-MC-06-0539)
FOR THE CINEMA STAR MULTI-PLEX THEATER
13 PROJECT (CENTRAL CITY NORTH REDEVELOPMENT
PROJECT)
14
15 I HEREBY CERTIFY that the foregoing Resolution was duly
16 adopted by the Mayor and Common Council of the City of
17 San Bernardino at a meeting
18 thereof, held on the day of
19 1998, by the following vote, to wit :
20 Council : AYES NAYS ABSTAIN ABSENT
ESTRADA
21 LIEN
ARIAS
22 SCHNETZ
DEVLIN
23 ANDERSON
MILLER
24
25 City Clerk
26 The foregoing resolution is hereby approved this
day of 1998 .
27
Mayor of the City of
28 San Bernardino
9
,b U.S.DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
WASHINGTON.D.C.20410-7000
7 * * P
O
4,p
`'OEVEv
1998
OFFICE OF THE ASSISTANT SECRETARY FOR MAR 13
COMMUNITY PLANNING AND DEVELOPMENT
MAR 1 6 (998
Honorable Tom Minor
Mayor of the City of San Bernardino DEVELOPMENT DEPARTMENT
San Bernardidno, CA 92418 ENT
Dear Mayor Minor:
Enclosed are documents to be executed pursuant to a loan
guarantee commitment by HUD under Section 108 of the Housing and
Community Development Act of 1974 , as amended. These documents
are: (i) promissory notes, (ii) two copies of the Contract for
Loan Guarantee Assistance, and (iii) Series 1997-B Fiscal Agency
Agreement .
These documents should be signed, as appropriate, by the
authorized representatives of the City, as borrower under the
Section 108-guaranteed loan. However, all dates (other than the
date under the signature line of the Contract) will be inserted
after the documents are returned.
Please return the executed Notes, Contracts, Fiscal Agency
Agreement and the legal opinions referred to below to:
U.S . Department of Housing and Urban Development
Attention: Paul D. Webster, Director
Financial Management Division
451 Seventh Street, S .W. - Room 7180
Washington, DC 20410 .
We enclose model opinions of counsel in draft, for
appropriate use by counsel to the City. These opinions should be
executed by counsel (on their letterhead) and should be addressed
as shown on the enclosed drafts . Further instructions for the
preparation of these opinions are included following the drafts.
The notes issued initially to the interim lender will
ultimately be replaced by a single note that will be included in
a pool of notes against which trust certificates will be sold in
a public offering. (The Contract for Loan Guarantee Assistance
will also have to be replaced by a new contract that will conform
to the issuance of trust certificates . ) At the time of the
public offering, the City will be required to pay its share of
the costs of the public offering, including the underwriters'
discount, the trustee' s fee, and the other costs of issuance .
CONTRACT FOR LOAN GUARANTEE ASSISTANCE UNDER
SECTION 108 OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT
OF 1974, AS AMENDED, 42 U.S.C. §5308
(PUBLIC AGENCY DESIGNEE AS BORROWER)
Date of Contract
This Contract for Loan Guarantee Assistance ( "Contract" ) is
entered into by the City of San Bernardino, California (the "Unit
of General Local Government" ) , the Redevelopment Agency of the
City of San Bernardino, as the designated public agency borrower
(the "Borrower" ) and the Secretary of Housing and Urban
Development ( "Secretary" ) as guarantor for the guarantee made
pursuant to Section 108 of Title I of the Housing and Community
Development Act of 1974, as amended ( "Title I" ) and to 24 C. F.R.
Part 570, Subpart M, of Note B-96-MC-06-0539, all notes
substituted as provided in the original Note, and any additional
notes issued pursuant to the loan guarantee commitment dated
December 9 , 1997, collectively, the "Notes" ) , all having the same
note number. The Notes are hereby incorporated into the
Contract . Terms used in the Contract with initial capital
letters and not otherwise defined in the text hereof shall have
the respective meanings given thereto in the Notes . The Borrower
and the Unit of General Local Government give the Secretary full
authority to act for the Borrower in negotiating with the
underwriters selected by the Secretary (the "Underwriters" ) the
terms of the public offering.
1. (a) All funds received by the Borrower under the Notes (the
"Guaranteed Loan Funds" ) shall be deposited immediately
on receipt in a separate identifiable custodial account
(the "Guaranteed Loan Funds Account" ) with a financial
institution whose deposits or accounts are Federally
insured. The balance of deposited funds exceeding such
insurance coverage shall be fully (100%) and
continuously collateralized by Government Obligations
as defined in paragraph 10 . Such collateral shall be
pledged under a written security agreement, in a form
acceptable to the Secretary, and shall be held in a
separate custodial account on behalf of the Borrower
for the full term of deposit . The Borrower shall
promptly deliver to the Secretary an assignment, in a
form acceptable to the Secretary, of its interest in
such collateral whenever the balance of deposited funds
exceeds such insurance coverage . 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" (Attachment 1) and shall be
accordance with paragraph 10 .
2 . Pursuant to a fiscal agency agreement, the Borrower shall
pay to the fiscal agent selected by the Underwriters (the
"Fiscal Agent" ) , as collection and paying agent for the
Notes, all amounts due pursuant to the terms of the Notes .
Payment shall be made by 3 : 00 P. M. (New York City time) on
the fifth Business Day preceding the relevant Payment Date.
("Business Day" shall mean a day on which banks in the city
in which the principal office of the Holder of the Notes is
located are not required or authorized to remain closed and
on which the Federal Reserve Bank of New York and the New
York Stock Exchange are not closed. ) Payment may be made by
check or wire transfer.
3 . The Secretary shall select a new fiscal agent on behalf of
the Borrower if the Fiscal Agent resigns or is removed by
the Secretary.
4 . (a) The Borrower shall pay the customary and usual
issuance, underwriting, and other costs of the public
offering and the interim financing, including the cost
of compensation of the Fiscal Agent . In the case of
the interim financing, the Fiscal Agent' s fees are
payable, and may be deducted by the Fiscal Agent from,
Advances under the Notes. In the case of the public
offering, such payment shall either be made by wire
transfer to the Fiscal Agent on the day prior to the
Public Offering Date or be made from the Guaranteed
Loan Funds on the Public Offering Date. (The "Public
Offering Date" shall be the date fixed as such in a
notice given by the Underwriters to the Secretary not
less than five Business Days in advance thereof . ) If
the Borrower does not make such payment, the Secretary
may make such payment with grants pledged pursuant to
paragraph 5 (a) .
(b) The Borrower shall reimburse the Underwriters for all
out-of-pocket expenses (including reasonable fees and
disbursements of counsel) incurred in connection with
the proposed public offering if the public offering
does not occur because of any refusal, inability, or
failure on the part of the Borrower to submit to the
Secretary no later than ten days before the estimated
Public Offering Date the executed notes for the public
offering; the executed fiscal agency agreement; and an
opinion of the Borrower' s counsel that the notes are
valid, binding, and enforceable obligations of the
Borrower, the governing body has authorized, in
accordance with applicable state and local law, the
issuance of the notes, the pledge of grants pursuant to
24 C. F.R. §570 . 705 (b) (2) is valid, there is no
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must be executed when the Loan Repayment Account is
established. (A fully executed copy of such Letter
Agreement shall be submitted to the Secretary within
thirty days of its execution. ) Borrower is authorized
to make withdrawals from said account only for the
purpose of paying interest and principal due on the
Notes, including the purchase of Government Obligations
in accordance with paragraph 10, or for the temporary
investment of funds, until final payment and discharge
of the indebtedness evidenced by the Notes, unless
otherwise expressly authorized by the Secretary in
writing. Investments shall be limited to Government
Obligations, as defined in paragraph 10, having
maturities that are consistent with cash requirements
for payment of principal and interest as required under
the Notes . In no event shall the maturities of such
investments exceed one year. All investments shall be
held in trust for the benefit of the Secretary by the
above financial institution in an account (the "Loan
Repayment Investment Account") established and
designated as prescribed in the attached form document
entitled "Letter Agreement for Section 108 Loan
Guarantee Program Custodial Investment Account"
(Attachment 2) and shall be maintained for Government
Obligations purchased with funds from the Loan
Repayment Account . The Loan Repayment Investment
Account need only be established if and when the
Borrower invests funds in the Loan Repayment Account in
Government Obligations . Such Letter Agreement must be
executed when the Loan Repayment Investment Account is
established. (A fully executed copy of such Letter
Agreement shall be 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 funds 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 a declaration of Default by the Secretary, all
right, title, and interest of the Borrower in and to
the Loan Repayment Account and Loan Repayment
Investment Account shall immediately vest in the
Secretary for use in the making of payments due on the
Notes or purchase of Government Obligations in
accordance with paragraph 10 .
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11. (a) A Default under the Notes shall occur upon failure by
the Borrower to:
(i) pay when due an installment of principal or
interest on the Notes, unless such payment is made when
due by the Secretary pursuant to paragraph 9 ; or
(ii) punctually and properly perform, observe, and
comply with any covenant, agreement, or condition
contained in: (A) this Contract, (B) any security
agreement, deed of trust, mortgage, assignment,
guaranty, or other contract securing payment of
indebtedness evidenced by the Notes, or (C) any future
amendments, modifications, restatements, renewals, or
extensions hereof or thereof .
(b) The Borrower and the Unit of General Local Government
waive notice of Default and opportunity for hearing
with respect to a Default under paragraph 11 (a) .
(c) The Secretary may declare the Notes in Default if the
Secretary makes a final decision in accordance with the
provisions of 24 CFR §570 . 913 , including requirements
for reasonable notice and opportunity for hearing, that
the Unit of General Local Government or the Borrower
has failed to comply substantially with Title I .
Notwithstanding any other provision, following the
giving of such reasonable notice, the Secretary may
withhold the guarantee of any or all obligations not
yet guaranteed under outstanding commitments, suspend
approval of further Advances under the Notes, and
request the Borrower' s financial institution to refuse
to honor any instruments drawn upon, or withdrawals
from, the Guaranteed Loan Funds Account or to release
obligations and assignments from the Guaranteed Loan
Funds Investment Account, pending the Secretary' s final
decision.
12 . Upon a declaration of Default, the Secretary may exercise any
or all of the following remedies :
(a) The Secretary may continue to make payments due on the
Notes or purchase Government Obligations in accordance
with paragraph 10 with any pledged funds and may use
pledged funds to pay any interest due for late payment.
(b) The Secretary may withhold the guarantee of any or all
obligations not yet guaranteed under outstanding
commitments .
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IN WITNESS WHEREOF, the undersigned, as authorized officials of
the Unit of General Local Government, the Borrower, and the
Secretary, have executed this Contract for Loan Guarantee
Assistance.
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
BORROWER
ATTEST: BY:
(Name) (Name)
(Title) (Title)
(Signature) (Signature)
(Date)
SECRETARY OF HOUSING AND URBAN DEVELOPMENT
BY:
Kenneth C. Williams
Deputy Assistant Secretary
for Grant Programs
(Date)
CITY OF SAN BERNARDINO, CALIFORNIA
UNIT OF GENERAL LOCAL GOVERNMENT
ATTEST: BY:
(Name) (Name)
(Title) (Title)
(Signature) (Signature)
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the "Security Interests" ) in the fixtures,
furnature and equipment described in Attachment 6
hereof (the "FF&E" ) . The security interest shall
be granted pursuant to an appropriate security
agreement (the "Security Agreement" ) , which
Security Agreement also shall be referenced in
appropriate Uniform Commercial Code Financing
Statements filed in accordance with the Uniform
Commercial Code. The Security Agreement and °such
Uniform Commercial Code Financing Statements shall
contain such provisions as the Secretary deems
necessary.
The Borrower shall select a financial institution
acceptable to the Secretary (the "Custodian" ) to
act as custodian for the documents specified in
(iii) below. 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 (iii) below.
Not later than five business days after receipt of
the Guaranteed Loan funds, the Borrower shall
deliver to the Custodian the following documents
(hereinafter collectively referred to as the
"Security Documents" ) :
(A) The original Obligor Note, endorsed in blank
and without recourse.
(B) The original Loan Agreement and an assignment
thereof, which assignment shall be in a form
acceptable to the Secretary.
(C) The original recorded Mortgage signed by the
Mortgagor and an assignment thereof, in a
recordable form but unrecorded, which
assignment shall be in a form acceptable to
the Secretary.
(D) The Security Agreement and an assignment
thereof, which assignment shall be in a form
acceptable to the Secretary.
(E) The original Collateral Assignment of
Interest in Leases and an assignment thereof,
which assignment shall be in a form
acceptable to the Secretary.
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theater operator.
(b) Paragraph 12 is amended by adding at the end thereof the
following language :
" (f) The Secretary may complete the endorsement of the
Obligor Note and record the assignments referred to in
paragraphs 5 (c) (iii) and thereby effectuate the
transfer of the documents referenced and underlying
indebtedness from the Borrower to the Secretary or the
Secretary' s assignee.
" (g) 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 5 (c) ) against the Collateral, against the
Borrower, against the Obligor, or against any other
person or property. "
(c) 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 5 (c) . Notification of an Event of Default shall
be delivered to the Secretary, at 451 Seventh Street, S .W. ,
Washington, D.C. 20410, Attention: Director, Financial
Management Division, Office of the Assistant Secretary for
Community Planning and Development . 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 Notes in Default and exercise any and all
remedies available under paragraph 12 . This paragraph 15 (c)
shall not affect the right of the Secretary to declare the
Notes in Default pursuant to paragraph 11 and to exercise in
connection therewith any and all remedies available under
paragraph 12 .
(d) At the option of the Secretary, the Notes shall be exchanged
for a new note (the "Replacement Note" ) repayable in
principal installments at times and in amounts identical to
the maturities and amounts specified in the Notes . The
Replacement Note shall be in a form that will enable the
Secretary to arrange for the issuance of trust certificates
or other obligations backed by a pool composed of the
Replacement Note (and similar notes issued by other Section
108 borrowers) . When notified in writing by the Secretary,
the Borrower shall execute and deliver to the Secretary the
Replacement Note and a new Contract for Loan Guarantee
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1
ATTACHMENT 1
< U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
LETTER AGREEMENT FOR
SECTION 108 LOAN GUARANTEE PROGRAM
CUSTODIAL ACCOUNT
Name of Institution (and Branch)
Street
City
DATE
j] This account is established for funds received by the Borrower
under note (s) guaranteed by the United States Department of
Housing and Urban Development (HUD) under the Section 108 Loan
Guarantee Program. (Guaranteed Loan Funds Account . )
j] This account is established for repayment of the note guaranteed
by HUD under the Section 108 Loan Guarantee Program. (Loan
Repayment Account) .
j] This account is established as a debt service reserve under
the Section 108 Loan Guarantee Program. (Debt Service Reserve
Account. )
You are hereby authorized and requested to establish a custodial
account to be specifically designated
Trustee of United States Department of Housing and Urban
Development. All deposits made in such account shall be subject to
withdrawal therefrom by the Borrower named below, and shall also be
subject to withdrawal therefrom by HUD. No agent of the Borrower
shall be authorized to withdraw funds from the account. You are also
authorized to pay HUD at any time upon its written demand, which need
not name a specific amount, the entire amount in such account subject
only to notice requirements contained in applicable regulations
governing this institution, but in no event to exceed seven business
days.
You are further authorized upon the request of HUD to refuse to
honor any instrument drawn upon or withdrawals from such account by
ATTACHMENT 2
U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
LETTER AGREEMENT FOR
SECTION 108 LOAN GUARANTEE PROGRAM
CUSTODIAL INVESTMENT ACCOUNT
Name of Institution (and Branch)
Street
City
DATE
[] This account is established to hold obligations and their
assignments, such obligations having been purchased with funds
from the Guaranteed Loan Funds Account. (Guaranteed Loan Funds
Investment Account . )
j] This account is established to hold obligations and their
assignments , such obligations having been purchased with funds
from the Loan Repayment Account. (Loan Repayment Investment
Account . )
[] This account is established to hold obligations and their
assignments, such obligations having been purchased with funds
from the Debt Service Reserve Account. (Debt Service Reserve
Investment Account . )
You are hereby authorized and requested to hold obligations and
assignments of those obligations in trust for the United States
Department of Housing and Urban Development (HUD) in an account
specifically designated
w
Trustee of United States Department of Housing and Urban
Development. " All obligations and assignments shall be subject to
release to the Borrower named below, and shall also be subject to
release to HUD. No agent of the Borrower shall be authorized to
release the obligations or assignments . You are also authorized to
release the obligations and assignments to HUD at any time upon its
written demand, which need not name specific obligations and
assignments, all obligations and assignments being held in such
account subject only to any notice requirements contained in
applicable regulations governing this institution, but in no event to
exceed seven business days .
ATTACHMENT 3
Legal Description of Real Property
[Borrower shall insert legal description]
ATTAC 5
Guaranty of Lease
r
SERIES 1997-B FISCAL AGENCY AGREEMENT
Section 1 . This SERIES 1997-B FISCAL AGENCY AGREEMENT (the
"Fiscal Agency Agreement" ) is made and entered into as of this
29th day of October, 1997, by and among the undersigned Borrower
(the "Borrower, " and collectively with other Borrowers, the
"Borrowers" ) and the Chase Manhattan Bank, a New York banking
corporation, as Fiscal Agent (the "Fiscal Agent" ) .
Section 2 . The parties agree that all terms and provisions
of the Master Fiscal Agency Agreement by and among the Borrowers
and the Fiscal Agent, a copy of which is attached hereto as
Exhibit A, are by this reference thereto incorporated herein and
made a part of this Fiscal Agency Agreement; and the parties
hereby agree to be bound by all such terms and provisions .
Section 3 . All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been
duly given when and if personally delivered at or mailed by
registered mail, postage prepaid (a) in the case of a Borrower,
to the address specified below, or such other address as may
hereafter be furnished to the Fiscal Agent in writing by such
Borrower, (b) in the case of the Fiscal Agent, to 450 West 33rd
Street, 8th Floor, New York, New York 10001, Attention:
Structured Finance Department in the Corporate Trustee
Administration Department, or such other address as may hereafter
be furnished to the Borrowers in writing by the Fiscal Agent and
(c) in the case of the Secretary, to 451 Seventh Street, S .W. ,
Washington, D.C. 20410, Attention: Director, Financial
Management Division, Office of the Assistant Secretary for
Community Planning and Development.
This Fiscal Agency Agreement may be executed in several
counterparts, each of which shall be an original and all of which
together constitute one and the same instrument.
tt.
EXHIBIT A
MASTER
FISCAL AGENCY AGREEMENT
among
the
BORROWERS
and
CHASE MANHATTAN BANK
(formerly Chemical Bank) ,
as Fiscal Agent
• 7' 08• Fidelity
7' 09- Fiscal A Bond or Insurance. . , , ,
Agent Not _
Liable for Investments, • • 36
ARTICLE VIII: TERMINATION - � • • " " • • 37
8.01.
Terminat
ion. . , , , , .
ARTICLE IX: MISCELLANEOIIS 'p " . . . . . . . . . . . . . . . . " " • 37
Amendment
ent. , - . • PROVISIONS
9. 02. . .
Inspection Of
9. 04. Governing Law, Documents bY'Holders. , � " " - • • • • • 38
9. 05. Notices. . . • - " " • - • . . . . . . . . 39
9. 06. Counterparty. of •Provisions, ' . . . . . . . . . . . . . . . . . . • " ' • 40
rParts. . . . . . . . • • - . . . . . . . . . " • • - 40
. . . - - - . . . . . . 41
Exhibit A-1 . Form Exhibit A_2. of Interim Note
Exhibit B, Form of Public Offerin
Exhibit C. Form of Guarantee g Note
Exhibit D. Form of Authorization
Exhibit E. DTC Letter to F Agent
Order
Letter of Representationst
from
F
Exhibit F. Fiscal Agent to DTC orm of Notice of Missed
Exhibit G. F from Fiscal A Borrower payment
orm of Notice for Guar to Secretary
Exhibit H, from Fiscal A Guarantee Payment
Schedule of Fiscal gent to Secretary
Note Services Agent Fees for Interim
Authorization Order: The written order of the Secretary
delivered to the Fiscal Agent pursuant to Section 2 . 03 hereto, in
substantially the form set forth in Exhibit C hereto.
Authorized Officer: When used with respect to the Fiscal
Agent, means the chairman or any vice chairman of the board of
directors, the chairman or any vice chairman of the executive
committee of the board of directors, the chairman of the trust
committee, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the
cashier, any assistant cashier, any trust officer or assistant
trust officer, the controller or any assistant controller or any
other officer of the Fiscal Agent customarily performing
functions similar to those performed by any of the above
designated officers and also-means, with respect to a particular
corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the
particular subject.
Authorized Official : When used with respect to the United
States Department of Housing and Urban Development, the Secretary
and any other official of such department who at the time shall
have been duly authorized to act on behalf of the Secretary.
Beneficial Owners : The actual purchasers of the Notes whose
ownership interests are recorded through the book-entry system of
DTC.
Borrowers : Eligible public entities, or public agencies
designated by such eligible public entities, which have issued
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Defeasance Account : With respect to any Note, any account
created and maintained pursuant to Section 3 . 06 .
Director, Financial Management Division: The Director of
the Financial Management Division, Office of the Assistant
Secretary for Community Planning and Development, U.S . Department
of Housing and Urban Development, and any other official of such
department who at the time shall have been duly authorized to act
on behalf of such Director.
Fee Account : With respect to any Note, any account created
and maintained pursuant to Section 6 . 01.
Funding Date: Unless otherwise agreed upon by the initial
Holder of an Interim Note and the Secretary, the date of an
Advance under an Interim Note, which shall be the Wednesday of
any week as requested by a Borrower pursuant to Section 2 . 04 . If
Wednesday is not a Business Day, then the Funding Date shall be
the next succeeding Business Day.
Fiscal Agent : Chase Manhattan Bank, a banking corporation
organized and existing under the laws of the State of New York,
or its successor in interest, or any successor fiscal agent
appointed as herein provided.
Government Obligation: 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,
including but not limited to, United States Treasury Certificates
of Indebtedness, Notes and Bonds - State and Local Government
Series, or certificates of ownership of the principal of or
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Note Account : With respect to any Note, the account created
and maintained pursuant to section 3 . 05 .
Note Register: The Register maintained by the Fiscal Agent
pursuant to Section 5 . 01 .
Opinion of Counsel : A written opinion of counsel for the
Secretary, who may be, but does not have to be, an employee of
the Department of Housing and Urban Development .
Payment Date : With respect to (a) a Public Offering Note,
each February 1 and August 1 or (b) an Interim Note, each
February 1, May 1, August 1 and November 1 and the Public
Offering Date or any other date specified in the Note, as
specified in such Note, on which interest or principal is due and
payable. If any Payment Date is not a Business Day, then
payments payable on such Payment Date shall be made on the next
Business Day.
Person: Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization or government, or any agency or political
subdivision thereof.
Principal Amount : . In the case of an Public Offering Note,
the principal amount stated on the face thereof, and, in the case
of an Interim Note, the aggregate amount of Advances thereunder,
which shall not exceed the Commitment Amount.
Public Offering Date: The date of the sale of the Notes to
the Underwriters in connection with the public offering of the
Notes.
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Advances under such Interim Note, which Principal Amount shall
not exceed such Interim Note' s Commitment Amount. On the date of
original delivery thereof to the Fiscal Agent, the Notes shall be
registered in the Note Register pursuant to instructions to be
furnished by the Underwriters, in the case of Public Offering
Notes, and the Secretary, in the case of Interim Notes, to the
Fiscal Agent at least two (2) Business Days before the date of
delivery to the Holders. The Borrowers authorize the Secretary
to list such Notes in the Authorization Order delivered by the
Secretary pursuant to Section 2 . 03 or the approval delivered by
the Secretary pursuant to Section 2 . 04 . The Fiscal Agent shall
have no responsibility in respect of the authorizations of any
Borrower hereunder or with respect to the information supplied by
the Secretary in the Authorization Order from the Secretary
pursuant to Section 2 . 03 or the approval from the Secretary
pursuant to Section 2 . 04 . Each Borrower does hereby designate
and appoint the Fiscal Agent as the paying agent and registrar of
all of such Borrower' s Notes and as the calculation agent of all
of such Borrower' s Interim Notes.
SECTION 2 .02. Acceptance by Fiscal Agent. Upon its receipt
of the Notes and their related Guarantees, the Fiscal Agent will
acknowledge receipt of such Notes and related Guarantees
delivered by the Secretary to the Fiscal Agent, as paying agent
and registrar and, in the case of the Interim Notes, also as
calculation agent, and will immediately deliver such Notes and
8
(d) the dates on which interest payments are due;
(e) the interest rates or interest rate formula and
Maturity Dates of the Notes;
(f) the Principal Amount, in the case of Public
Offering Notes, or the Commitment Amount and amount of any
Advance, in the case of any Interim Notes, of the Notes of
each Borrower that the Secretary has authorized for delivery
by the Fiscal Agent, for registration and subsequent
delivery to the registered Holder;
(g) whether the Notes and their related Guarantees are
to be held physically by the Fiscal Agent or transferred to
DTC or other Holder (or its nominee) of the Notes, and the
date such delivery or transfer is to occur;
(h) whether the Notes are subject to redemption or
acceleration prior to their Maturity Dates and if so, the
terms and conditions relating to any- redemption or
acceleration; and
(i) any additional directions from the Secretary
regarding the public offering of the Notes.
SECTION 2 .04. Advances under Interim Notes. (a) Each
Interim Note provides that the initial Holder thereof shall make
an initial Advance under the Interim Note on any Funding Date
upon the written request of the Borrower and the approval of the
Secretary provided, however, that no Advances shall be made
during the period beginning seven days before the Public Offering
Date to and including the Public Offering Date or thereafter
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the initial Holder of each Interim Note of the requested Advance
and payment instructions therefor no later than 10 : 00 a.m. on the
Business Day before the Funding Date. The initial Holder of each
Interim Note shall remit to the Fiscal Agent Federal funds
representing the aggregate amount of all Advances for such
Funding Date, which shall not be less than $100, 000 (unless
otherwise agreed by the initial Holder and the Secretary) no
later than 2 :00 p.m. on such Funding Date. The Fiscal Agent
shall remit the proceeds of each Advance in accordance with the
instructions provided to the Fiscal Agent by the Secretary to the
respective Borrower thereof, net of any fees due the Fiscal Agent
pursuant to Section 6 . 01 (a) hereof.
(d) The Fiscal Agent shall keep a record of all Advances
pursuant to any Interim Note . By the fifth Business Day of each
month, the Fiscal Agent shall provide the Secretary, the Holder
of the related Interim Notes and the Underwriters with a report
of the total amount of Advances per Borrower and Maturity Date as
of the last day of 'the preceding month.
ARTICLE III
ADMINISTRATION OF NOTES
SECTION 3 .01. Modification of Notes. Any term of any Note
may be modified by such amendments. as may be agreed upon from
time to time by the Secretary and the Holder (or if the Holder is
DTC, by the Beneficial Owners of such Note) and the Borrower
12
. a
option of the Borrower on any Payment Date on or after an
optional redemption date as set forth in the related Note . The
Holders of Notes will have no optional redemption rights with
respect to a Note. If no optional redemption date for a Note is
indicated in the applicable Note, such Note will not be
redeemable prior to the Maturity Date. In order to elect an
optional redemption of a redeemable Note, the Borrower shall give
notice of its intention to redeem such Note to the Fiscal Agent
not less than sixty (60) days nor more than ninety (90) days
prior to the Payment Date on which the Borrower intends to redeem
the Note. The Fiscal Agent shall give such notice to Holders of
Notes not less than thirty (30) days nor more than sixty (60)
days prior to the desired redemption date.
SECTION 3 .03 . Collection on Guarantees . Pursuant to each
Guarantee, the Secretary will unconditionally guarantee the
payment of all principal and interest on the Note to which such
Guarantee relates when and as due in accordance with the terms of
the Notes. With respect to Notes held by DTC or its nominee and
pursuant to the request of DTC, in substantially the form set
forth in Exhibit D hereto, the Fiscal Agent hereby agrees to
serve as DTC' s agent solely for the purpose of collecting payment
on any guarantee while DTC or its nominee is the Holder of the
corresponding Note.
SECTION 3 . 04 Notification of Amounts Due. (a) In the case
of the Public Offering Notes, within four (4) months after the
Public Offering Date, the Fiscal Agent shall prepare and provide
14
SECTION 3 .05 . Collection of Payments; Note Account. For
each of its Notes, a Borrower shall establish and maintain with
the Fiscal Agent a separate, non-interest bearing trust account
(a "Note Account") into which the Fiscal Agent shall deposit the
following:
(a) All regular payments on such Note, including those
made by the Borrower, those made with funds transferred by
the Fiscal Agent from the Defeasance Account to the Note
Account, and those made by the Secretary pursuant to a
Guarantee; and
(b) All principal payments on such Note at its Maturity
Date, including those made by the Borrower, those made with
funds transferred by the Fiscal Agent from the Defeasance
Account to the Note Account, and those made by the Secretary
pursuant to a Guarantee.
Guarantee Payments made by the Secretary in accordance with
the terms of Section 3 . 07 herein shall be deposited by the Fiscal
Agent in the applicable Note Account . The moneys held as part of
a Note Account shall be held in trust for the benefit of the
Holder of the corresponding Note and shall be applied by the
Fiscal Agent in accordance with the provisions of Section 3 . 08
herein. If permitted by applicable law and agreed to by the
Secretary, the Fiscal Agent may maintain an omnibus account for
all Note Accounts to be described in an amendment to this
document and to be signed by the Fiscal Agent and acknowledged by
the Secretary.
16
has marked its books and records to reflect that it is holding
such securities in trust solely for the benefit of the Holder of
the Note being defeased. Moneys and investments held as part of
a Defeasance Account shall be applied by the Fiscal Agent solely
to the payment of principal of and interest on the related Note
and shall be maintained free of all liens, except such liens as
may be created by this Agreement. All of the Borrower' s Notes or
all of the Borrower' s Notes of any maturity may be defeased as
provided herein. The Borrower' s election to defease any Note
shall not result in the payment of interest before the applicable
due date or of principal before the earlier of the Maturity Date
or the first optional redemption date of such Note, as the case
may be.
Upon and in accordance with the Secretary' s instructions
pursuant to the corresponding Contract, the Fiscal Agent shall
apply so much of the sums deposited in a Defeasance Account as
shall be necessary to purchase the Government Obligations
designated by the Secretary' s instructions . The Fiscal Agent
shall collect on the due dates thereof the principal of and
interest and premium, if any, on the Government Obligations on
deposit in the Defeasance Account and shall, without further
authorization or direction, apply such receipts on each Payment
Date to the payment of interest then due and on the earlier of
the Maturity Date or optional redemption date, as specified in
the Note, to the payment of principal. At the opening of
business on the relevant Payment Date, the Fiscal Agent shall
18
Date, the Fiscal Agent shall determine whether all payments
required to be made on the Notes have been duly received from
each Borrower. If such payments have not been received, the
Fiscal Agent shall notify the Secretary by a telephone call to
the Director, Financial Management Division, confirmed in writing
by telex or telecopy in the form attached hereto as Exhibit F,
that the Secretary may be required to make a Guarantee Payment,
and shall provide notice of the amount of such payment. If a
payment required to be made by a Borrower on a Note has not been
duly received by the Fiscal Agent by the close of business on the
Payment Date, no later than 10 : 00 a.m. (New York City time) on
the Business Day next succeeding the relevant Payment Date, the
Fiscal Agent shall notify the Secretary, by a telephone call to
the Director, Financial Management Division, confirmed in writing
by telex or telecopy, in the form attached hereto as Exhibit G,
that the Secretary is required to make a Guarantee Payment and
shall provide notice of the amount of such payment . The
Secretary shall make any required Guarantee Payment by wire
transfer to the Fiscal Agent in Federal funds, for subsequent
payment by the Fiscal Agent to the Holder in accordance with the
terms of Section 4 . 01 herein. If a payment required to be made
on a Note has not been duly received from either the Borrower or
the Secretary by 2 :30 p.m. on the second Business Day next
succeeding the Payment Date, pursuant to the terms of the
Borrower's Contract, interest shall accrue on the amount of such
20
agrees to furnish a copy of such page with its notice pursuant to
Section 3 .04 (b) .
SECTION 3 .08. Permitted Charges Acgainst Note Account. The
Fiscal Agent shall, from time to time, withdraw funds from a Note
Account for the following purposes :
(a) to make payments to the Holders in the amounts
and in the manner provided for in Section 4 . 01;
(b) to reimburse the Secretary for a Guarantee
Payment made with respect to the Note to which such
Note Account relates, provided that such reimbursement
shall be limited to amounts received by the Fiscal
Agent that represent late recoveries of payments of
principal and/or interest respecting which any
Guarantee Payment was made; and
(c) to clear and terminate the Account pursuant to
Section 8 . 01.
SECTION 3 .09 . Fiscal Agent to Cooperate; Release of Notes.
Upon payment in full to the Holder of any Note (including
pursuant to the related Guarantee) , the Fiscal Agent shall
release the Note to the Secretary.
SECTION 3 .10 . Replacement Notes. (a) With respect to those
Notes held by DTC or its nominee, in the event that the Fiscal
Agent is given notice that DTC has determined to discontinue
providing its services as securities depository with respect to
the Notes and their related Guarantees, the Fiscal Agent and the
Secretary shall arrange for another qualified securities
22
(d) If (i) any mutilated Note is surrendered to the Fiscal
Agent, or the Fiscal Agent receives evidence to its satisfaction
of the destruction, loss or theft of any Note, and (ii) there is
delivered to the Fiscal Agent such security or indemnity as may
be required by it to hold it, the Borrower and the Secretary
harmless, then, in the absence of notice to the Fiscal Agent that
such Note has been acquired by a bona fide purchaser and upon the
Holder's paying reasonable expenses of the Fiscal Agent, the
Borrower under such Note shall execute and the Fiscal Agent shall
deliver, in exchange for such mutilated Note or in lieu of such
destroyed, lost or stolen Note, a new Note of like principal
amount or appreciated Principal Amount, as appropriate, date and
tenor. If any such mutilated, destroyed, lost or stolen Note has
become or on or before the next Note Payment Date will become due
and payable, the Fiscal Agent may, in its discretion, pay such
Note when due instead of delivering a new Note.
ARTICLE IV
PAYMENTS
SECTION 4,01. Payments. On each Payment Date relating to a
particular Note, the Fiscal Agent, as paying agent for the
Borrower under such Note, shall pay to the corresponding Holder
determined as of the close of business on the next preceding
Record Date (other than as provided in Section 8 .01 respecting
the final payment) all amounts credited to the Note Account
24
• e
REGISTRATION OF NOTES
SECTION 5.01. Registration of Transfers and Exchanges of
Notes. The Fiscal Agent shall be the registrar of the Notes for
the purposes of registering the Notes and maintaining a record of
any transfers and exchanges of Notes as herein provided. The
Fiscal Agent shall cause to be kept at the office to be
maintained in accordance with the provisions of Section 5 . 03
hereof, a Note Register in which it shall record for each Note,
the name and address of the registered Holder, the Principal
Amount and Maturity Date thereof and such other information as
may be required by applicable law or regulation.
Registration of transfer shall be subject to such reasonable
regulations as the Fiscal Agent may prescribe. No registration
of transfer or exchange of any Note may be made unless all
information required to be provided by the Holder has been given
as provided in the form of Note. Upon surrender for registration
or transfer of any Note at the office that the Fiscal Agent
maintains for such purpose pursuant to Section 5 .03 , the Fiscal
Agent shall execute and deliver, or cause the Borrower under such
Note to execute and deliver in the name of the designated
transferee or transferees, one or more new Notes of like
aggregate Principal Amount .
At the option of the Holder, a Note may be exchanged for
Notes of like aggregate Principal Amount, upon surrender at the
26
SECTION 5.03 . Maintenance of Office or Agency. The Fiscal
Agent shall maintain a designated office or agency where Notes
may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Borrowers or the Fiscal
Agent in respect of the Notes and this Agreement may be served.
The Fiscal Agent designates its Corporate Trust Office as such
office for said purposes.
ARTICLE VI
RIGHTS AND DUTIES OF BORROWERS
SECTION 6.01. Compensation and Indemnification of Fiscal
Agent. (a) Each Borrower under an Interim Note agrees to pay the
Fiscal Agent fees for the services the Fiscal Agent provides in
respect of such Interim Note. Such fees shall be as set forth in
Exhibit H hereof and shall be deducted by 'the Fiscal Agent
directly from the proceeds of any Advance in respect of an
Interim Note.
(b) Each Borrower agrees to pay the Fiscal Agent an initial
fee on the Public Offering Date as reasonable compensation for
all services to be rendered by it hereunder with respect to the
Public Offering Notes and as payment or reimbursement for all
reasonable expenses and disbursements to be incurred by the
Fiscal Agent therewith under the Agreement. The Fiscal Agent
shall deposit such fee in a Fee Account separate and apart from
all other accounts of such Borrower and the Fiscal Agent . On an
28
Notes administered pursuant to this Agreement, or any moneys
received with respect thereto, or any claim against the Holders
of the Notes, by reason of the failure of the Borrowers to pay
any of such charges or expenses, and (b) the Borrowers shall not
be required to pay any out-of-pocket expenses incurred by the
Fiscal Agent to the extent that the expenses are chargeable under
Section 5.01 hereof to persons requesting the transfer or
exchange of Notes.
The terms of this Section 6 . 01 with respect to claims
arising in connection with the Fiscal Agent' s duties while acting
as such shall survive the termination of this Agreement or the
resignation or removal of the Fiscal Agent.
ARTICLE VII
RIGHTS AND DUTIES OF FISCAL AGENT
SECTION 7 .01. Duties of Fiscal Agent. The Fiscal Agent
undertakes to perform only such duties as are specifically set
forth in this Agreement . With respect to each Note and the
related Guarantee that are delivered to the Fiscal Agent, the
Fiscal Agent shall act as paying agent and registrar for the
Notes and, in the case of the Interim Notes, also as calculation
agent. Except upon compliance with the provisions of Sections
2. 03 or 3 .09, none of the Notes, their related Guarantees or any
other related instruments or documents shall be delivered by the
30
Officer or Authorized Officers of the Fiscal Agent, unless
it shall be proved that the Fiscal Agent was grossly
negligent in ascertaining the pertinent facts; and
(c) In no event shall the Fiscal Agent be liable
hereunder for special, indirect or consequential loss or
damage of any kind whatsoever.
SECTION 7.02 . Certain Matters Affecting Fiscal Agent.
Except as otherwise provided in Section 7. 01:
(a) The Fiscal Agent may rely and shall be protected
in acting or refraining from acting upon any resolution,
certificate of an Authorized Official, certificate of
auditors or any other certificate, statement, instrument,
opinion (including an oral opinion or advice of counsel) ,
report, notice, request, consent, order, appraisal, bond or
other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or
parties;
(b) The Fiscal Agent may consult with counsel who may
be, but does not have to be, an employee of the Fiscal Agent
and any opinion of such counsel, whether oral or written,
shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such opinion
of counsel, and the Fiscal Agent shall not be required to
take any action in violation of law or any action that
32
the use or application by the Secretary or any Borrower of any of
the Notes or of the proceeds of such Notes .
SECTION 7 .04. Eligibility Requirements for Fiscal Agent.
The Fiscal Agent hereunder shall at all times be a corporation
having its principal office in the State of New York and
organized and doing business under the laws of such State of the
United States of America, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of
at least $100, 000, 000 and subject to supervision or examination
by Federal or State authority. If such corporation publishes
reports of condition at least annually, pursuant to law or the
requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section 7 . 04, the combined capital
and the surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent
report of condition so published. In case at anytime the Fiscal
Agent shall cease to be eligible in accordance with the
provisions of this Section 7 . 04, the Fiscal Agent shall resign
immediately in the manner and with the effect specified in
Section 7.05 .
SECTION 7 .05. Resignation and Removal of Fiscal Agent.
Subject to the further provisions of this Section 7 . 05, the
Fiscal Agent may resign at any time and be discharged from its
duties as the Fiscal Agent hereunder by giving at least sixty
(50) days, prior written notice of such resignation to the
Secretary and the Borrowers and specifying the date on which such
34
deliver all of the Notes and their related Guarantees (if then
held by the Fiscal Agent) and other property relating to the
Notes then in its custody to such successor fiscal agent or the
Secretary, as the case may be, all funds in or otherwise to the
credit of the Note Accounts, the Fee Account and the Defeasance
Accounts. The Fiscal Agent shall otherwise release, assign and
deliver to such successor fiscal agent or the Secretary, as the
case may be, against receipt by such successor fiscal agent or
the Secretary, as the case may be, including without limitation,
by transmitting to such successor fiscal agent or the Secretary,
as the case may be, for deposit in successor accounts,
established by the successor fiscal agent or the Secretary, as
the case may be, all other property relating to the Notes in its
possession, and effect a transfer of such property in such manner
and pursuant to such instruments as the Secretary shall
reasonably request. The Fiscal Agent shall likewise deliver at
such time to such successor fiscal agent or the Secretary, as the
case may be, all of the Note Registers and all related records
and documents in its possession. The Fiscal Agent shall not be
discharged from its duties or obligations hereunder following its
resignation or removal until such property has been delivered to
such successor or the Secretary, as the case may be, and
transferred, as provided above.
SECTION 7.06. Merger or Consolidation of Fiscal Agent. Any
corporation into which the Fiscal Agent may be merged or
converted or with which it may be consolidated, or any
36
SECTION 8.01. Termination. The respective obligations and
responsibilities of the Borrowers and the Fiscal Agent created
hereby with respect to any Note administered by the Fiscal Agent
(other than the obligations of the Borrowers and the Fiscal Agent
to make payments to Holders as hereafter set forth) shall
terminate upon the final payment of the last Note administered by
the Fiscal Agent at its Maturity Date. No notice need be given
and final payment will be made from the corresponding Note '
Account on the next following Payment Date upon presentment and
surrender of the Note at the office maintained pursuant to
Section 5. 03 .
With respect to each Borrower, upon the final payment of
principal of and interest on each Note, for which a separate Note
Account has been established pursuant to Section 3 . 05, the Fiscal
Agent shall notify the Secretary of any moneys deposited in such
Note Account that have remained unclaimed by any Holder entitled
to receive the same for at least two (2) years after the date
upon which such final payment should have been made. The Fiscal
Agent may, and upon receipt of a written request of the Secretary
shall, pay over to the Secretary the unclaimed amount so
deposited and the Holder shall thereafter look only to the
Secretary for payment of such unclaimed amount, and all liability
of the Fiscal Agent with respect to such unclaimed amount shall
thereon cease.
ARTICLE T_X
38
shall adversely affect the rights of the Holder or Holders of any
Note issued in accordance with the terms of this Agreement and
outstanding at the time of such amendment, modification, waiver
or consent. The Fiscal Agent may, but shall not be obligated to,
enter into any amendments that affect its rights, duties and
immunities under this Agreement .
SECTION 9.02 . Inspection of Documents by Holders . The
Fiscal Agent shall keep a fully executed or conformed copy of
this Agreement (together with all amendments, supplements,
waivers and consents hereto) on file at its Corporate Trust
Office, and shall permit reasonable inspection (and limited
copying) to be made of this Agreement during normal business
hours by any Holder or by its designee, at such Person' s expense,
provided that the Person purporting to be such Holder or designee
establishes his identity and capacity to the Fiscal Agent' s
satisfaction.
SECTION 9 .03 . Governing Law. This Agreement and the Notes
and all rights hereunder and thereunder and provisions hereof and
thereof shall be governed by, and construed in accordance with,
the laws of the State of New York applicable to contracts made
and to be performed therein, and the obligations, rights and
remedies of the parties hereunder and thereunder shall be
determined in accordance with such laws.
SECTION 9 .04. Notices. All demands, notices and
communications hereunder shall be in writing and shall be deemed
to have been duly given when and if personally delivered at or
40
or terms of this Agreement and shall in no way affect the
validity or enforceability of the other provisions of this
Agreement or of the Notes or the rights of the Holders thereof.
SECTION 9 .06. Counterparts. This Agreement may be executed
in several counterparts, each of which shall be an original and
all of which together constitute one and the same instrument .
IN WITNESS WHEREOF, the Borrowers and the Fiscal Agent have
duly approved the terms and provisions hereof by causing the
names of their respective officers duly authorized to be executed
on counterpart agreements in respect of each series of Notes .
42
EXHIBIT C
[FORM OF AUTHORIZATION ORDER]
19_
Chase Manhattan Bank, as
Fiscal Agent under the
Fiscal Agency Agreement
referred to below
55 Water Street
Room 606
New York, New York 10041
Attention: Mortgage-Backed Securities Department
Dear Sirs:
The following information is being furnished to you pursuant to
I (i) ] Section [2 . 03] [2 . 04] of the Fiscal Agency Agreement dated as
of , 19_ providing for the issue of U.S . Government
Guaranteed Notes, Series [, and (ii) Section of the
Underwriting Agreement dated as of I , 19 . 1
Capitalized terms used herein and not otherwise defined herein have
the same meanings as in the Fiscal Agency Agreement .
ARTICLE I . Information regarding Notes to be registered in the
name of and delivered to the Holders :
(a) Interim Note Public Offering Note
1 (b) Note series : ]
I (c) Name and address of initial Holder]
(d) Interest Payment Dates : Semiannual interest payments on
[February 1 and August 11 [February 1, May 1, August 1 and November
11 , commencing [insert first interest Payment Date] to the Maturity
Date indicated below.
i
W [Additional directions, such as identification of each
Note the first page of which is to be replaced with substitute pages
enclosed herewith. ]
ARTICLE II . [Additional payment instructions, i .e. ,
instructions to the Fiscal Agent regarding application of proceeds
of the Notes and of funds received by the Secretary from the
Borrower to be deposited with the Fiscal Agent at the time of
delivery of the Notes. ]
Very truly yours,
SECRETARY OF HOUSING AND
URBAN DEVELOPMENT
By:
Name:
Title:
3
Capitalized terms used but not defined herein have the meanings
given them in the Fiscal Agency Agreement.
Very truly yours,
THE DEPOSITORY TRUST COMPANY
By:
Authorized Officer
Accepted:
Chase Manhattan Bank,
as Fiscal Agent
By:
Authorized Officer
Acknowledged:
SECRETARY OF HOUSING AND
URBAN DEVELOPMENT
By:
Authorized Officer
2
2 . The Documents provide for the solicitation of
consents from holders of the Notes under certain
circumstances. The Fiscal Agent shall establish a
record date for such purposes and give DTC notice of
such record dated not less than 15 calendar days in
advance of such record date to the extent possible.
3 . All notices and payments addressed to DTC
shall contain the CUSIP numbers of the Notes.
4 . Notices to DTC by facsimile transmission shall
be sent to (516) 227-4039 or (516) 227-4190 . Notices
to DTC by any other means shall be sent to:
Municipal Reorganization Manager
Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, New York 11530
5 . Interest payments on the Notes shall be
received by CEDE & CO. , as nominee of DTC, or its
registered assigns, in Federal funds on each payment
date. Such payments shall be made payable to the order
of "CEDE & CO. " .
6 . Payments of principal shall be received by
CEDE & CO. , as nominee of DTC, or its registered
assigns in Federal funds on the maturity date of each
Note. Principal payments shall be made payable to the
order of "CEDE & CO. , " and shall be addressed as
follows:
Municipal Redemption Department
The Depository Trust Company
55 Water Street, 50th Floor
New York, New York 10041
Attention: Collection Supervisor
7. DTC may direct the Fiscal Agent to use any
-other telephone number for facsimile transmission,
address or department of DTC as the number, address, or
department to which payments of interest or principal
may be sent.
8 . In the event that beneficial owners of the
Notes shall be able to obtain Notes pursuant to the
Documents, the Fiscal Agent shall notify DTC of the
availability of Notes, and shall issue, transfer, and
exchange Notes as required by DTC and others in
appropriate amounts .
2
SCHEDULE A
U.S. Government Guaranteed Notes
Series 19_-A
Principal MaturityInterest CUSIP
Borrower Amount Date Rate Number
4
EXHIBIT G
(FORM OF NOTICE FOR GUARANTEE PAYMENT
FROM FISCAL AGENT TO SECRETARY]
Secretary
United States Department
of Housing and Urban Development
451 Seventh Street, S .W.
Washington, D.C. 20410
Attention: Director, Financial Management Division
Office of the Assistant Secretary for
Community Planning and Development
Re: Series 19 Fiscal Agency Agreement,
dated as of , 19
Dear Sir or Madam:
We are furnishing this notice to you pursuant to Section 3 . 07
of the Fiscal Agency Agreement, dated as of , 19—,
providing for the issue of U.S . Government Guaranteed Notes,
Series (the "Fiscal Agency Agreement") .
Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned in the Fiscal Agency Agreement .
This letter confirms our previous telephone notice to you
that we have not received the payment required to be made on the-
Note of (insert Borrower
name] , Note No. with a maturity date of
August 1, in the amount of $ Our letter,
dated I to you notified you that we had not
received such payment as of such date.
We are writing this letter to inform you that you are
required pursuant to your Guarantee of such Note to make a
Guarantee Payment in the amount on $ in respect
of the above-mentioned Note. Payment should be made by wire
transfer to us in immediately available funds to:
[Insert wire instructions here. ]
Very truly yours,
Chase Manhattan Bank, as Fiscal
Agent
under the Fiscal Agency Agreement
By:
Name:
Title.
r
EXHIBIT H
SCHEDULE OF FISCAL AGENT FEES
FOR INTERIM NOTE SERVICES
$50.00 per advance, broken down as follows:
$10 . 00 - custodial/fiscal agency services
15 . 00 - wire fee
25 . 00 - paying agency services
Fees to be deducted from Advances due a Borrower at the time the
Fiscal Agent remits proceeds to Borrower.
SAMPLE LETTER---REQUEST FOR ADVANCE -- ON BORROWER'S LETTERHEAD
U.S. Department of Housing and Urban Development
Paul Webster, Director, Financial Management Division
451 Seventh Street, S.W. - Room 7180
Washington, D.C. 204.1. 0
Dear Mr. Webster:
The [name of BORROWER] hereby requests an advance in the
amount of $ under a note ( or under notes)
guaranteed pursuant to Section 108 of the Housing and community
Development Act of 1974, as amended.
The amount to be advanced under the note(s) is $
Please wire transfer the advance using the following
information:
BORROWER
AMOUNT
PROMISSORY NOTE NUMBER
1. Name of Bank
2. Address of Receiving Bank
3. A.B.A. Number* ;
4. Borrower's Account Number
S. Account Name
6. Bank Official To Contact
7. Phone Number of Bank Official
CORRESPONDENT BANK (If applicable)
1. Bank
2. Address
3. A.B.A. Identification*
4. Borrower's Account Number
5. Name of Account
* American Bankers Association number (9 digits)
This letter must be signed by two officials with signatures on
the authorized signature card.
In my [our] capacity of legal counsel, I [we] have made an
examination and investigation of all such matters of fact and
questions of law as I [we] consider necessary or advisable to
enable me [us] to render the opinion hereafter set forth.
Specifically, and without limiting the generality of the
foregoing, I [we] have examined:
1. [Cite applicable provisions of the Constitution and/or
Statutes of the State [Commonwealth] . ] [Optional]
2 . [Cite applicable provisions of Charter and Ordinances
of the City, County, etc . , Borrower. ] [Optional]
3 . Resolution No. of the governing body of the
[City, County, etc . ] dated which
(i) authorizes the [City, County, etc. ] to enter into
this transaction, (ii) authorizes [Insert name or
title of official (s) authorized to execute Contract for
City, County, etc. ] to act as the official
representatives] of the City and to execute on behalf
of the [City, County, etc. ] all documents necessary or
desirable to accomplish the transaction, including the
Contract, and (iii) designates the Borrower to act as
such in connection with the transaction, including
execution of the Contract and the Note.
4 . Resolution No. of the governing body of the
Borrower dated , which (i) authorizes
the Borrower to enter into the transaction, and (ii)
authorizes [Insert name or title of official (s)
authorized to execute Note and Contract for Borrower]
to act as the official representative[s] of the
Borrower and to execute on behalf of Borrower all
documents necessary or desirable to accomplish the
transaction, including the Contract and the Note.
5 . The Contract.
6. The Note.
7 . The Series 1997-B Fiscal Agency Agreement.
Based on the foregoing investigation and authorities, I am
[we are] of the opinion that:
1. The [City, County, etc. ] and the Borrower have
authorized in accordance with [the cited] [applicable] State and
local law, the transaction, including issuance of the Note by the
Borrower, the pledge of grant funds by the [City, County, etc. ]
and by the Borrower, and the execution of all documents necessary
or desirable to accomplish the transaction.
2
[Model No. 2 - Separate Opinion from attorney or firm
representing only the designated public agency/Borrower. ]
[For use with Models No. 3 and 4 attached. ]
Honorable Andrew Cuomo
Secretary of Housing and Urban Development
451 7th Street, S. W.
Washington, D. C. 20410
Dear Secretary Cuomo:
The undersigned, being duly licensed and in good standing to
practice law in the State [Commonwealth] of , is
legal counsel to the [Insert name of designated public agency]
( "Borrower" ) , a public agency designated by the [City, County,
etc. ] of (the " [City, County, etc. ] " ) , to
issue the notes referred to herein and to receive the proceeds
thereof. As such, I [we] have represented the Borrower regarding
certain promissory notes, collectively referred to as Note No.
in the total amount of $
(the "Note" ) , to be executed by Borrower payable to the order of
the Registered Holder thereof, and to be guaranteed by the
Secretary of Housing and Urban Development ( "HUD" ) under section
108 of the Housing and Community Development Act of 1974, as
amended, 42 U. S.C. 5308 ( "Section 108" ) . The Note will initially
be issued to the interim lender, which will make advances to the
Borrower in the amount requested by the Borrower under the Note.
HUD's guarantee of the Note will be governed by the Contract for
Loan Guarantee Assistance under Section 108 between the [City,
County, etc. ] , the Borrower and HUD (the "Contract" ) , in which
the [City, County, etc. ] and the Borrower pledge Community
Development Block Grants pursuant to 24 CFR 570 .705 (b) (2) , as
well as any other security specified therein, as security for
HUD's guarantee. [Optional sentence - It is anticipated that a
revised Contract and a Replacement Note, execution of which may
require a further opinion of this offfice, will be included in a
trust created by HUD (together with other section 108 Notes
issued by other borrowers) , and participation certificates based
on the trust will ultimately be sold in a future public offering
by the underwriters selected by HUD.]
In my [our] capacity of legal counsel, I [we] have made an
examination and investigation of all such matters of fact and
questions of law as I [we] consider necessary or advisable to
enable me [us] to render the opinion hereafter set forth.
Specifically, and without limiting the generality of the
foregoing, I [we] have examined:
1. [Cite applicable provisions of the Constitution and/or
Statutes of the State [Commonwealth] ] [Optional]
4
[Model No. 3 - Separate opinion from attorney or firm
representing only the unit of general local government]
Honorable Andrew Cuomo
Secretary of Housing and Urban Development
451 7th Street, S. W.
Washington, D. C. 20410
Dear Secretary Cuomo:
The undersigned, being duly licensed and in good standing to
practice law in the State of , is acting as
legal counsel to the [City, County, etc. ] of
(the " [City, County, etc. ] " ) . This opinion is issued in
connection with certain promissory Notes, collectively referred
to as Note No. in the total amount of $
(the "Note" ) , to be issued by the Insert name of the City or
County' s designated public agency] (the "Borrower" ) payable
to the order of the Registered Holder thereof, and to be
guaranteed by the Secretary of Housing and Urban Development
( "HUD" ) under section 108 of the Housing and Community
Development Act of 1974, as amended, 42 U.S.C. 5308 ( "Section
10811 ) . HUD' s guarantee of the Note will be governed by the
Contract for Loan Guarantee Assistance under Section 108 between
the Borrower, the [City, County, etc. ] and HUD (the "Contract" ) ,
in which the City, as a statutory condition of the guarantee,
pledges Community Development Block Grants pursuant to 24 CFR
570 .705 (b) (2) and the Contract as security for HUD' s guarantee.
[Optional sentence - It is anticipated that a revised Contract,
execution of which may require a further opinion of this offfice,
and a Replacement Note will be included in a trust created by HUD
(together with other Section 108 Notes issued by other
borrowers) , and participation certificates based on the trust
will ultimately be sold in a future public offering by the
underwriters selected by HUD. ]
In my [our] capacity of legal counsel, I [we] have made an
examination and investigation of all such matters of fact and
questions of law as I [we] consider necessary or advisable to
enable me [us] to render the opinion hereafter set forth.
Specifically, and without limiting the generality of the
foregoing, I [we] have examined the Contract and Resolution No.
of the governing body of the [City, County, etc. ] dated
(i) authorizing Borrower to enter into this
transaction, (ii) authorizing (Insert name or title of
official (s) authorized to execute Contract for City, County,
etc. to execute on behalf of the [City, County, etc . ] all
documents necessary or desirable to accomplish the transaction,
including the Contract, and (iii) designating the Borrower as the
6
• IModel No. 4 - opinion to Fiscal Agent from designated public
agency's counsel]
The Chase Manhattan Bank
450 West 33rd Street, 8th Floor
New York, New York 10001
To Whom It May Concern:
The undersigned, being duly licensed and in good standing to
practice law in the State [Commonwealth] of
is
legal counsel to the rInsert name of designated public agency]
("Borrower" ) . As such, I [we] have represented Borrower
regarding certain promissory notes, collectively referred to as
Note No. in the total amount of $
(the "Note" ) , to be executed by Borrower payable to the order of
the Registered Holder thereof, and to be guaranteed by the
Secretary of Housing and Urban Development ( "HUD" ) under section
108 of the Housing and Community Development Act of 1974, as
amended, 42 U.S .C. 5308 ( "Section 10811 ) . HUD' s guarantee of the
Note will be governed by the Contract for Loan Guarantee
Assistance under Section 108 between the Borrower, the [City,
County, etc. ] of , and HUD, in
which the [City, County, etc. ] pledges Community Development
Block Grants pursuant to 24 CFR 570 .705 (b) (2) , as well as any
other security specified therein, as security for HUD' s
guarantee.
In my [our] capacity as legal counsel, I [we] have made an
examination and investigation of all such matters of fact and
questions of law as I [we] consider necessary or advisable to
enable me [us] to render the opinion hereafter set forth. In
particular, I [we] have examined the Series 1997-B Fiscal Agency
Agreement between Borrower and The Chase Manhattan Bank, which
incorporates by reference a Master Fiscal Agency Agreement
establishing certain obligations of Borrower and delineating the
role and compensation of The Chase Manhattan Bank (formerly
Chemical Bank) in serving as fiscal agent with respect to the
Note (and similar notes issued by other section 108-guaranteed
borrowers) .
After such investigation, I am (we are) of the opinion that
the above-referenced Series 1997-B Fiscal Agency Agreement has
been properly authorized and executed on behalf of the Borrower
and, when executed on behalf of The Chase Manhattan Bank, will be
a valid, binding and enforceable obligation of the Borrower under
State and local law.
Sincerely,
8
enforceability of the notes may be limited by bankruptcy,
insolvency, reorganization, moratorium, liquidation, or similar
general laws or equity principles relating to or affecting
creditors, rights or providing remedies for the relief of
debtors, or that the availability of specific performance or
injunctive relief in aid of enforcement of the documents may be
limited by equitable rights and defenses . HUD is aware that
there may be exceptions to the enforceability of its rights as a
creditor based on generally applicable laws and equitable
principles; that is why HUD regards the pledge of present and
future CDBG grants, which are controlled by HUD, as the principal
security for repayment of the notes . The purpose of the legal
opinions is not to get an attorney to act as insurer of the
absolute enforceability of the documents but rather to require
that there has been legal review adequate to assure proper
authorization and execution of the notes and related documents by
the proper parties under State and local law.
Generally, where multiple officials are each required to
execute the documents, they should each be listed in the
appropriate paragraphs of the opinion to the Secretary, and the
last named official should be preceded by "and. " If alternative
authorized officials are listed, only one of whom must execute
the documents, the last named official should be preceded by
"or. " For officials who sign documents only for purposes of
attestation, it is not nececessary to list them as authorized in
the opinion.
4. The above opinions are for transactions in which CDBG
entitlement grantees use designated public agencies to act as
Borrower (to issue notes and receive the proceeds thereof) under
the Contract for loan guarantee assistance, pursuant to 24 CFR
§ 570 .704 (c) (4) and .705 (b) . In these cases, there are two
possibilities with respect to legal opinions . Opinion No. 1 (the
combined opinion) above assumes that the same attorney
represented both the Borrower and the unit of general local
government in this transaction. Opinions No. 2 and 3 assume
different counsel represented the applicant unit of general local
government and its designated publc agency. HUD has no
preference as which of the two opinion structures is used - this
is left to local discretion. However, counsel purporting to
represent the Borrower public agency must issue the fourth
opinion above, to The Chase Manhattan Bank regarding the Fiscal
Agency Agreement.
If you are involved in a transaction where there is no
designated public agency, or involving a section 108 loan
guarantee on behalf of a nonentitlement unit of general local
government, HUD has model opinions specifically adapted for those
transactions . Please contact the program office listed in the
paragraph 7 for copies thereof .
10
NOTE
NOTE NUMBER: B-96-MC-06-0539 DATE OF NOTE:
BORROWER: REDEVELOPMENT AGENCY CUSIP NUMBER:
OF THE CITY OF SAN BERNARDINO,
CALIFORNIA MATURITY DATE : AUGUST 1 , 1998
COMMITMENT PUBLIC OFFERING DATE :
AMOUNT: $180 , 000 . 00
PRINCIPAL
INTERIM INTEREST AMOUNT:
RATE: As set forth below.
REGISTERED PUBLIC OFFERING
HOLDER: AFTERWATCH & CO INTEREST RATE :
As Nominee for
Money Market Obligations
Trust, on behalf of its
Government Obligations Fund
For value received, the undersigned, Redevelopment Agency of
the City of San Bernardino (the "Borrower" , which term includes any
successors and assigns) , a public entity organized and existing
under the laws of the State of California, promises to pay to the
order of the above-named Registered Holder (the "Holder" , which
term includes any successors or assigns) , at the time, in the
manner, and with interest at the rate or rates hereinafter
provided, such amounts as may be advanced under this Note from time
to time by the initial Holder to the borrower (individually, the
"Advance" , and collectively, the "Advances" ) . The initial Holder
shall make the Advances upon the written request of the Borrower
and the approval of the Secretary of Housing and Urban Development
or his designee (the "Secretary" ) , pursuant to the Contract and the
Fiscal Agency Agreement (each as hereinafter defined) , which
provisions shall not be deemed to vary any obligations specified in
this Note; provided, however, that the total amount of Advances
under this Note shall not exceed the Commitment Amount as specified
on the face of this Note . The Fiscal Agent shall record the date
and amount of all Advances and maintain the books and records of
all such Advances .
a.m. , London time, on the day (the "Determination Date" ) that is
two London banking days preceding the relevant Reset Date . If such
rate does not appear on Telerate Page 3750 on such Determination
Date, such rate shall be obtained from the Reuters Screen ISDA Page
as of 11 :00 a.m. , London time, on such Determination Date. If, in
turn, such rate does not appear on the Reuters Screen ISDA Page on
such Determination Date, the offered quotation from each of four
reference banks (expressed as a percentage per annum) as of
approximately 11 : 00 a.m. , London time, on such Determination Date
for deposits in U.S . dollars to prime banks on the London interbank
market for a 3-month period, commencing on the Reset Date, shall be
obtained. If at least two such quotations are provided, 3-month
LIBOR for such Reset Date will be the arithmetic mean of the
quotations, rounded to five decimal places. If fewer than two such
quotations are provided as requested, 3-month LIBOR for that
Determination Date shall be the rate for the most recent day
preceding such Determination Date for which 3-month LIBOR shall
have been displayed on Telerate Page 3750 . The 3-month LIBOR for
any interest period shall be converted to a bond-equivalent yield
basis by multiplying such rate by the actual number of days in such
interest period and dividing that number by 180 .
"Applicable LIDO Rate" means : (1) with respect to the initial
interest rate for the first Advance hereunder, the LIDO Rate two
London Banking Days before the date of such first Advance; (2) with
respect to the initial interest rate for any subsequent Advance
made before the first Reset Date, the interest rate borne by the
first Advance; (3) with respect to the initial interest rate for
any subsequent Advance made after the first Reset Date, the LIDO
Rate two London Banking Days before the immediately preceding Reset
Date; and (4) with respect to the subsequent interest rate at any
Reset Date for any Advance, the LIDO Rate two London Banking Days
before such Reset Date.
In the event that the Public Offering Date is a date
subsequent to December 31, 1998, interest from and after such
December 31, 1998 to the Public Offering Date shall be paid on the
unpaid principal balance of all Advances at a rate to be determined
by the initial Holder hereof, which, based upon then prevailing
market conditions and taking into account all the circumstances,
will enable the Holder to sell the Interim Note at one hundred
percent (100%) of the aggregate amount of all Advances owing
hereunder. Such interest rate shall be determined as of
January 1, 1999, and shall be determined again on each February 1,
May 1, August 1, and November 1 thereafter. The initial Holder
shall notify the Fiscal Agent within two Business Days of the
determination of the applicable interest rate.
The interest rate as of the Public Offering Date (the "Public
Offering Interest Rate" ) shall be specified on the face of this
Note and shall be that rate which the Underwriters (as hereinafter
defined) determine will enable them to sell this Note under then
3
contemporaneously with the execution of this Note, and shall be
issued pursuant to and in accordance with the terms and provisions
of the Contract and Section 108 of the HCD Act .
As used in this Note, the following terms with initial capital
letters shall have the following meanings . "London Banking Day"
means any day in which dealings in deposits in United States
dollars are transacted in the London interbank market . The
"Underwriters" shall mean the Underwriters selected by the
Secretary. The "Public Offering Date" shall be that date
determined by the Underwriters after consultation with the
Secretary and specified in a notice given by the Underwriters to
the Holder not less than seven (7) calendar days in advance
thereof.
Pursuant to the Fiscal Agency Agreement, the Fiscal Agent
shall, in connection with the public offering of this Note, insert
in the spaces provided on the face of this Note the Public Offering
Date, the Public Offering Interest Rate, the Principal Amount, the
CUSIP Number and such other information as may be required pursuant
to the terms of the Fiscal Agency Agreement . On and after the
Public Offering Date, this Note may be exchanged for a new note or
notes to be delivered by the Borrower in connection with the public
offering, such exchange to occur at a time and place to be
designated by the Underwriters . The new notes shall be modified in
such form as agreed to by the Secretary and the Underwriters, all
in accordance with the terms and provisions of the Contract .
Except as otherwise provided herein, this Note may not be
amended without the prior written consent of the Secretary and of
all Borrowers under the Fiscal Agency Agreement; provided, however,
that no such amendment shall reduce in any manner the amount of, or
delay the timing of, payments to be received by the Fiscal Agent,
including Guarantee Payments, which are required to be distributed
on any Note without the consent of the Holder or, if applicable,
the Beneficial Owners, of such Note. Subject to the foregoing
proviso, with the prior written consent of the Secretary, the
Borrower and the Fiscal Agent may from time to time agree to amend
any provision of this Note so long as such amendment relates only
to the Borrower and the Fiscal Agent and shall not adversely affect
the rights of the other Borrowers that are parties to the Fiscal
Agency Agreement . Prior to the Public Offering Date, the Borrower
hereby agrees to allow the Secretary to consent on its behalf to
such modifications, including any modifications with respect to the
interest rate borne by this Note.
At any time on or before the Public Offering Date, the
Borrower, with the consent of the Secretary and notice to the
Fiscal Agent, may prepay this Note, in whole or in part, upon seven
calendar days notice to the Holder and the Secretary, at the
purchase price of one hundred percent (1000) of the unpaid
principal amount to be prepaid, plus accrued interest thereon to
5
IN WITNESS WHEREOF, the undersigned, as an authorized official
of the Borrower, has executed and delivered this Note .
THE REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO, CALIFORNIA
BORROWER
By:
(Signature)
(Name)
ATTEST:
By:
(Signature) (Title)
(Name)
(Title)
7
96-MC-06-0539
August 1 , 1998
.aunt : $180 , 000 . 00
OF SAN BERNARDINO,
0RNIA
RECORD OF ADVANCES
Authorized
Official
Name :
,-ance : Title:
:est Rate :
_ . Name :
ance : Title :
est Rate :
Name :
. ance : Title :
est Rate :
Name:
.=ce : Title :
_-est Rate :
Name :
-:nce : Title :
st Rate :
Name:
Title :
Name :
'Title-:
9
Note Number: B-96-MC-06-0539
Date of Note :
Maturity Date : August 1, 1998
Commitment Amount : $180 , 000 . 00
Borrower: CITY OF SAN BERNARDINO,
CALIFORNIA
Registered Holder:
RECORD OF INTEREST RATES
Initial Interest Rate
Date: , 19
LIDO Rate as of two London Banking
Days preceding 19_
Initial Interest Rate :
Authorized Official :
Name:
Title .
Reset Rates
LIDO Rate as of two Applicable
London Banking Days Interest Authorized
Reset Date preceding Reset Date Rate Official
Name :
Title .
Name :
Title .
Name :
Title
Name:
Title .
Name:
Title .
Name:
Title
Name:
Title .
Name :
Title .
Name:
Title
Name :
Title.
Name :
Title.
11
NOTE
NOTE NUMBER: B-96-MC-06-0539 DATE OF NOTE:
BORROWER: REDEVELOPMENT AGENCY CUSIP NUMBER:
OF THE CITY OF SAN BERNARDINO,
CALIFORNIA MATURITY DATE : AUGUST 1, 1999
COMMITMENT PUBLIC OFFERING DATE:
AMOUNT: $190 , 000 . 00
PRINCIPAL
INTERIM INTEREST AMOUNT:
RATE: As set forth below.
REGISTERED PUBLIC OFFERING
HOLDER: AFTERWATCH & CO INTEREST RATE:
As Nominee for
Money Market Obligations
Trust, on behalf ,of its
Government Obligations Fund
For value received, the undersigned, Redevelopment Agency of
the City of San Bernardino (the "Borrower" , which term includes any
successors and assigns) , a public entity organized and existing
under the laws of the State of California, promises to pay to the
order of the above-named Registered Holder (the "Holder" , which
term includes any successors or assigns) , at the time, in the
manner, and with interest at the rate or rates hereinafter
provided, such amounts as may be advanced under this Note from time
to time by the initial Holder to the borrower (individually, the
"Advance" , and collectively, the "Advances" ) . The initial Holder
shall make the Advances upon the written request of the Borrower
and the approval of the Secretary of Housing and Urban Development
or his designee (the "Secretary" ) , pursuant to the Contract and the
Fiscal Agency Agreement (each as hereinafter defined) , which
provisions shall not be deemed to vary any obligations specified in
this Note; provided, however, that the total amount of Advances
under this Note shall not exceed the Commitment Amount as specified
on the face of this Note . The Fiscal Agent shall record the date
and amount of all Advances and maintain the books and records of
all such Advances .
a.m. , London time, on the day (the "Determination Date" ) that is
two London banking days preceding the relevant Reset Date. If such
rate does not appear on Telerate Page 3750 on such Determination
Date, such rate shall be obtained from the Reuters Screen ISDA Page
as of 11 : 00 a.m. , London time, on such Determination Date . If, in
turn, such rate does not appear on the Reuters Screen ISDA Page on
such Determination Date, the offered quotation from each of four
reference banks (expressed as a percentage per annum) as of
approximately 11 : 00 a.m. , London time, on such Determination Date
for deposits in U.S. dollars to prime banks on the London interbank
market for a 3-month period, commencing on the Reset Date, shall be
obtained. If at least two such quotations are provided, 3-month
LIBOR for such Reset Date will be the arithmetic mean of the
quotations, rounded to five decimal places . If fewer than two such
quotations are provided as requested, 3-month LIBOR for that
Determination Date shall be the . rate for the most recent day
preceding such Determination Date for which 3-month LIBOR shall
have been displayed on Telerate Page 3750 . The 3-month LIBOR for
any interest period shall be converted to a bond-equivalent yield
basis by multiplying such rate by the actual number of days in such
interest period and dividing that number by 180 .
"Applicable LIDO Rate" means : (1) with respect to the initial
interest rate for the first Advance hereunder, the LIDO Rate two
London Banking Days before the date of such first Advance; (2) with
respect to the initial interest rate for any subsequent Advance
made before the first Reset Date, the interest rate borne by the
first Advance; (3) with respect to the initial interest rate for
any subsequent Advance made after the first Reset Date, the LIDO
Rate two London Banking Days before the immediately preceding Reset
Date; and (4) with respect to the subsequent interest rate at any
Reset Date for any Advance, the LIDO Rate two London Banking Days
before such Reset Date.
In the event that the Public Offering Date is a date
subsequent to December 31 , 1998, interest from and after such
December 31, 1998 to the Public Offering Date shall be paid on the
unpaid principal balance of all Advances at a rate to be determined
by the initial Holder hereof, which, based upon then prevailing
market conditions and taking into account all the circumstances,
will enable the Holder to sell the Interim Note at one hundred
percent (10016) of the aggregate amount of all Advances owing
hereunder. Such interest rate shall be determined as of
January 1, 1999, and shall be determined again on each February 1,
May 1, August 1, and November 1 thereafter. The initial Holder
shall notify the Fiscal Agent within two Business Days of the
determination of the applicable interest rate.
The interest rate as of the Public Offering Date (the "Public
Offering Interest Rate" ) shall be specified on the face of this
Note and shall be that rate which the Underwriters (as hereinafter
defined) determine will enable them to sell this Note under then
3
contemporaneously with the execution of this Note, and shall be
issued pursuant to and in accordance with the terms and provisions
of the Contract and Section 108 of the HCD Act .
As used in this Note, the following terms with initial capital
letters shall have the following meanings . "London Banking Day"
means any day in which dealings in deposits in United States
dollars are transacted in the London interbank market . The
"Underwriters" shall mean the Underwriters selected by the
Secretary. The "Public Offering Date" shall be that date
determined by the Underwriters after consultation with the
Secretary and specified in a notice given by the Underwriters to
the Holder not less than seven (7) calendar days in advance
thereof.
Pursuant to the Fiscal Agency Agreement, the Fiscal Agent
shall, in connection with the public offering of this Note, insert
in the spaces provided on the face of this Note the Public Offering
Date, the Public Offering Interest Rate, the Principal Amount, the
CUSIP Number and such other information as may be required pursuant
to the terms of the Fiscal Agency Agreement . On and after the
Public Offering Date, this Note may be exchanged for a new note or
notes to be delivered by the Borrower in connection with the public
offering, such exchange to occur at a time and place to be
designated by the Underwriters . The new notes shall be modified in
such form as agreed to by the Secretary and the Underwriters, all
in accordance with the terms and provisions of the Contract .
Except as otherwise provided herein, this Note may not be
amended without the prior written consent of the Secretary and of
all Borrowers under the Fiscal Agency Agreement; provided, however,
that no such amendment shall reduce in any manner the amount of, or
delay the timing of, payments to be received by the Fiscal Agent,
including Guarantee Payments, which are required to be distributed
on any Note without the consent of the Holder or, if applicable,
the Beneficial Owners, of such Note. Subject to the foregoing
proviso, with the prior written consent of the Secretary, the
Borrower and the Fiscal Agent may from time to time agree to amend
any provision of this Note so long as such amendment relates only
to the Borrower and the Fiscal Agent and shall not adversely affect
the rights of the other Borrowers that are parties to the Fiscal
Agency Agreement . Prior to the Public Offering Date, the Borrower
hereby agrees to allow the Secretary to consent on its behalf to
such modifications, including any modifications with respect to the
interest rate borne by this Note.
At any time on or before the Public Offering Date, the
Borrower, with the consent of the Secretary and notice to the
Fiscal Agent, may prepay this Note, in whole or in part, upon seven
calendar days notice to the Holder and the Secretary, at the
purchase price of one hundred percent (10006) of the unpaid
principal amount to be prepaid, plus accrued interest thereon to
5
IN WITNESS WHEREOF, the undersigned, as an authorized official
of the Borrower, has executed and delivered this Note.
THE REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO, CALIFORNIA
BORROWER
By:
(Signature)
(Name)
ATTEST:
By:
(Signature) (Title)
(Name)
(Title)
7
Note Number: B-96-MC-06-0539
Date of Note :
Maturity Date : August 1, 1999
Commitment Amount : $190 , 000 . 00
Borrower: CITY OF SAN BERNARDINO,
CALIFORNIA
Registered Holder:
RECORD OF ADVANCES
Authorized
Official
Advance Number: Name :
Amount of Advance : Title :
Date Made :
Initial Interest Rate :
Advance Number: Name :
Amount of Advance : Title :
Date Made:
Initial Interest Rate :
Advance Number: Name:
Amount of Advance : Title :
Date Made:
Initial Interest Rate :
Advance Number: Name :
Amount of Advance : Title :
Date Made:
Initial Interest Rate :
Advance Number: Name:
Amount of Advance : Title :
Date Made:
Initial Interest Rate:
Advance Number: Name :
Amount of Advance : Title :
Date Made:
Initial Interest Rate :
Advance Number: Name:
Amount of Advance : Title :
Date Made:
Initial Interest Rate:
9
Note Number: B-96-MC-06-0539
Date of Note:
Maturity Date : August 1, 1999
Commitment Amount : $190 , 000 . 00
Borrower: CITY OF SAN BERNARDINO,
CALIFORNIA
Registered Holder:
RECORD OF INTEREST RATES
Initial Interest Rate
Date: , 19
LIDO Rate as of two London Banking
Days preceding 19_ a
Initial Interest Rate :
Authorized Official :
Name :
Title .
Reset Rates
LIBO Rate as of two Applicable
London Banking Days Interest Authorized
Reset Date preceding Reset Date Rate Official
Name-
Title .
Name:
Title .
Name:
Title
Name :
Title .
Name:
Title .
Name :
Title
Name :
Title.
Name :
Title.
Name:
Title
Name :
Title .
Name:
Title .
11
NOTE
NOTE NUMBER: B-96-MC-06-0539 DATE OF NOTE:
BORROWER: REDEVELOPMENT AGENCY CUSIP NUMBER:
OF THE CITY OF SAN BERNARDINO,
CALIFORNIA MATURITY DATE: AUGUST 1 , 2000
COMMITMENT PUBLIC OFFERING DATE :
AMOUNT: $200 , 000 . 00
PRINCIPAL
INTERIM INTEREST AMOUNT:
RATE: As set forth below.
REGISTERED PUBLIC OFFERING
HOLDER: AFTERWATCH & CO INTEREST RATE:
As Nominee for
Money Market Obligations
Trust, on behalf of its
Government Obligations Fund
For value received, the undersigned, Redevelopment Agency of
the City of San Bernardino (the "Borrower" , which term includes any
successors and assigns) , a public entity organized and existing
under the laws of the State of California, promises to pay to the
order of the above-named Registered Holder (the "Holder" , which
term includes any successors or assigns) , at the time, in the
manner, and with interest at the rate or rates hereinafter
provided, such amounts as may be advanced under this Note from time
to time by the initial Holder to the borrower (individually, the
"Advance" , and collectively, the "Advances") . The initial Holder
shall make the Advances upon the written request of the Borrower
and the approval of the Secretary of Housing and Urban Development
or his designee (the "Secretary" ) , pursuant to the Contract and the
Fiscal Agency Agreement (each as hereinafter defined) , which
provisions shall not be deemed to vary any obligations specified in
this Note; provided, however, that the total amount of Advances
under this Note shall not exceed the Commitment Amount as specified
on the face of this Note . The Fiscal Agent shall record the date
and amount of all Advances and maintain the books and records of
all such Advances .
a.m. , London time, on the day (the "Determination Date" ) that is
two London banking days preceding the relevant Reset Date. If such
rate does not appear on Telerate Page 3750 on such Determination
Date, such rate shall be obtained from the Reuters Screen ISDA Page
as of 11 : 00 a.m. , London time, on such Determination Date . If, in
turn, such rate does not appear on the Reuters Screen ISDA Page on
such Determination Date, the offered quotation from each of four
reference banks (expressed as a percentage per annum) as of
approximately 11 : 00 a.m. , London time, on such Determination Date
for deposits in U.S . dollars to prime banks on the London interbank
market for a 3-month period, commencing on the Reset Date, shall be
obtained. If at least two such quotations are provided, 3-month
LIBOR for such Reset Date will be the arithmetic mean of the
quotations, rounded to five decimal places . If fewer than two such
quotations are provided as requested, 3-month LIBOR for that
Determination Date shall be the rate for the most recent day
preceding such Determination Date for which 3-month LIBOR shall
have been displayed on Telerate Page 3750 . The 3-month LIBOR for
any interest period shall be converted to a bond-equivalent yield
basis by multiplying such rate by the actual number of days in such
interest period and dividing that number by 180 .
"Applicable LIBO Rate" means : (1) with respect to the initial
interest rate for the first Advance hereunder, the LIBO Rate two
London Banking Days before the date of such first Advance; (2) with
respect to the initial interest rate for any subsequent Advance
made before the first Reset Date, the interest rate borne by the
first Advance; (3) with respect to the initial interest rate for
any subsequent Advance made after the first Reset Date, the LIBO
Rate two London Banking Days before the immediately preceding Reset
Date; and (4) with respect to the subsequent interest rate at any
Reset Date for any Advance, the LIBO Rate two London Banking Days
before such Reset Date .
In the event that the Public Offering Date is a date
subsequent to December 31, 1998, interest from and after such
December 31, 1998 to the Public Offering Date shall be paid on the
unpaid principal balance of all Advances at a rate to be determined
by the initial Holder hereof, which, based upon then prevailing
market conditions and taking into account all the circumstances,
will enable the Holder to sell the Interim Note at one hundred
percent (1000) of the aggregate amount of all Advances owing
hereunder. Such interest rate shall be determined as of
January 1, 1999, and shall be determined again on each February 1,
May 1, August 1, and November 1 thereafter. The initial Holder
shall notify the Fiscal Agent within two Business Days of the
determination of the applicable interest rate.
The interest rate as of the Public Offering Date (the "Public
Offering Interest Rate" ) shall be specified on the face of this
Note and shall be that rate which the Underwriters (as hereinafter
defined) determine will enable them to sell this Note under then
3
contemporaneously with the execution of this Note, and shall be
issued pursuant to and in accordance with the terms and provisions
of the Contract and Section 108 of the HCD Act .
As used in this Note, the following terms with initial capital
letters shall have the following meanings . "London Banking Day"
means any day in which dealings in deposits in United States
dollars are transacted in the London interbank market . The
"Underwriters" shall mean the Underwriters selected by the
Secretary. The "Public Offering Date" shall be that date
determined by the Underwriters after consultation with the
Secretary and specified in a notice given by the Underwriters to
the Holder not less than seven (7) calendar days in advance
thereof.
Pursuant to the Fiscal Agency Agreement, the Fiscal Agent
shall, in connection with the public offering of this Note, insert
in the spaces provided on the face of this Note the Public Offering
Date, the Public Offering Interest Rate, the Principal Amount, the
CUSIP Number and such other information as may be required pursuant.
to the terms of the Fiscal Agency Agreement . On and after the
Public Offering Date, this Note may be exchanged for a new note or
notes to be delivered by the Borrower in connection with the public
offering, such exchange to occur at a time and place to be
designated by the Underwriters . The new notes shall be modified in
such form as agreed to by the Secretary and the Underwriters, all
in accordance with the terms and provisions of the Contract .
Except as otherwise provided herein, this Note may not be
amended without the prior written consent of the Secretary and of
all Borrowers under the Fiscal Agency Agreement; provided, however,
• that no such amendment shall reduce in any manner the amount of, or
delay the timing of, payments to be received by the Fiscal Agent,
including Guarantee Payments, which are required to be distributed
on any Note without the consent of the Holder or, if applicable,
the Beneficial Owners, of such Note. Subject to the foregoing
proviso, with the prior written consent of the Secretary, the
Borrower and the Fiscal Agent may from time to time agree to amend
any provision of this Note so long as such amendment relates only
to the Borrower and the Fiscal Agent and shall not adversely affect
the rights of the other Borrowers that are parties to the Fiscal
Agency Agreement . Prior to the Public Offering Date, the Borrower
hereby agrees to allow the Secretary to consent on its behalf to
such modifications, including any modifications with respect to the
interest rate borne by this Note.
At any time on or before the Public Offering Date, the
Borrower, with the consent of the Secretary and notice to the
Fiscal Agent, may prepay this Note, in whole or in part, upon seven
calendar days notice to the Holder and the Secretary, at the
purchase price of one hundred percent (1001i) of the unpaid
principal amount to be prepaid, plus accrued interest thereon to
5
IN WITNESS WHEREOF, the undersigned, as an authorized official
of the Borrower, has executed and delivered this Note .
THE REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO, CALIFORNIA
BORROWER
By:
(Signature)
(Name)
ATTEST:
By:
(Signature) (Title)
(Name)
(Title)
7
Note Number: B-96-MC-06-0539
Date of Note :
Maturity Date: August 1 , 2000
Commitment Amount : $200 , 000 . 00
Borrower: CITY OF SAN BERNARDINO,
CALIFORNIA
Registered Holder:
RECORD OF ADVANCES
Authorized
Official
Advance Number: Name :
Amount of Advance : Title:
Date Made:
Initial Interest Rate :
Advance Number: Name :
Amount of Advance: Title :
Date Made:
Initial Interest Rate :
Advance Number: Name :
Amount of Advance : Title :
Date Made:
Initial Interest Rate :
Advance Number: Name :
Amount of Advance: Title :
Date Made:
Initial Interest Rate :
Advance Number: Name:
Amount of Advance: Title :
Date Made:
Initial Interest Rate :
Advance Number: Name :
Amount of Advance : Title :
Date Made:
Initial Interest Rate:
Advance Number: Name:
Amount of Advance: Title:
Date Made:
Initial Interest Rate:
9
Note Number: B-96-MC-06-0539
Date of Note :
Maturity Date : August 1, 2000
Commitment Amount : $200 , 000 . 00
Borrower: CITY OF SAN BERNARDINO,
CALIFORNIA
Registered Holder:
RECORD OF INTEREST RATES
Initial Interest Rate
Date: , 19
LIDO Rate as of two London Banking
Days preceding 19_
Initial Interest Rate: °s
Authorized Official :
Name :
Title.
Reset Rates
LIDO Rate as of two Applicable
London Banking Days Interest Authorized
..teset Date preceding Reset Date Rate Official
Name :
Title .
Name :
Title .
Name :
Title
Name :
Title:
Name:
Title .
Name:
Title
Name:
Title.
Name :
Title.
Name :
Title
Name :
Title .
Name:
Title.
11
6-12-1998 10:30AM FROM METROPOLITAN DEV 3104168711 P. 3
uyi1l1116 rAl lu'33 VAA J1C ea3 **ZJ WWI 11UAAi. Alb Vluue
Corr nwdal Mortgage
Vacp R.Garbonkus
Senior Vicet prmident
June 12, 1998
ltea SwaasOn
MDA-Sau Bernardino Associates LLC
Clo Maropolitan Development
300 Continental Boulevard,Suite 360
El Segundo, California 90245
RE: CinemaStar"theater
San Bernardino,CA
Dear Mr.Swanson:
The purpose of this letter is to acknowledge the receipt of the required fees totaling$55,000
from MDA.San Bernardino Associates LLC in conformance with your application of March
10 1998,for a Forward Cormi ftent for a permanent loan and your application,dated March
12, 1998,for a first Mortgage Construction Loan_ Further,this letter will Surnrnarme the
general terms of the financing applied for subject to the final terms and conditions contained in
the final loan documents.
COIVSTRUCMQ1 TT LOAN
Construction Loan $3,600,000
Interest Rate Two and one half percent(2.5 9%)over the
30 day 1.1808.
Term r Twelve(12)months with one six(6)
month extension.,
Comrm*tment Fee 2%of the Principal amount of the loan or
872,000.
Name of Borrower MDA-San Bernardino Associates,LLC. a
Delaware Limited liability Company
100 South Wacker Drive • SuRe 490 Chicago,IL 606'06 • 312-846-8520 • Fax 312-845-8623
6-12-1998 10:30AM FROM METROPOLITAN DEV 3104168711 P. 4
U0/1Z/V0 k'tu MbO kAA J1Z Edb 8624 WUL CU1UtL 1114 WJUUj
Specific Tamar and Conditions of Construction Lawn:
• An executed act lease from CinernaStar luxury Theaters,Inc. for the improvements,a 25
year tarn and amn=1 rental payments ofnot less than$1,328,000 and other terms and
conditions acceptable to GMACCM.
• Review of all documentation of the HUD 108 Loan and funds from the San Bernardino
Rcdcvclopmc=Agency. All terms and conditions acceptable to GMACCIVL
• GMACCM shall have a right of first refusal to finance the retail component of the
development.
• A$360,000 Borrower funded interest reserve included in the construction cost in addition
to GMACCM's typical reserves reasonably calculated at underwriting.
• GMACCM will be assigned the Borrower's rights under the Agreement with the Agency to
take title to the retail parcels and construct the retail space if the Borrower defaults under
the Constrt=on Laau or until such time as the Borrower records a separate loss.for the
retail space with another lender.
PERMANEN!LU N
Loan Amount 53.600,000
Purpose Forward Commitment to refinance GMACCM
construction loan.
Test 10 years
Amortization 20 years
Interest Rate 250 basis points y.M the Index
Index The Benchmark 10 year United States Treasary
t
Security
Commitme`at Fee 1%of the principal amount of the Loan or$36,004
Borrower Borrower will be a single purpose entity("SPE'l
formed cxr,1usively for the purpose of owning xr4
operaturg the property and shall be prohibited from
ertiaeirg in any otherbuainess activity or incurring
any other liability other than the Loan and those
associated with routine Property operating expenses
and requacd capital improverncrtts to the Property
("the SPIE Covcnants'� A subataruivc non-
consolidation opinion may be required.
6-12-1998 1O:31AM FROM METROPOLITAN DEV 3104168711 P. 5
UO/1L/8D rK1 lu;30 PM JIL 84' 65LJ LAMA. W IIL IIllu
Further details as to the terms and conditions related to the construction loan and the pemianent
loan are contained in the Application for Forward Commitment For a Permanent Loan dated
March 10, 1998 and the Application to GMAC Cormnercial Mortgage Corporation For a First
Mwtgage Coashvction Loan encautcd by you on March 12, 1495.Nothing con=ned herein
shall be deemed an approval of either the Penma=n Commiunent or Construction
Commitment,until each is approved by the appropriate Loan Committee and final loan
doetm Mts acceptable to GMAC Commerrmal Mortgage Corporation have been prepared.
Please call me should you have any questions regarding this information.
GMAC Co Corporation.
•By: _\
vA4+rs �+ fs ZSsm+:c•.+
4
CITY OF SAN BERNARDINO
ntered into Record gt
CouncillCmyDerCms AAtr -/5--
INTEROFFICE MEMORANDUM r
by
re Agenda Item
TO: James F. Penman
City Attorney
City Clerk/CDC Secy
FROM: Huston T. Carlyle, Jr. City of San Bernardino
Sr. Assistant City Attorne `
DATE: June 15, 1998
RE: Cinema Theater Project
Section 2.17d. of the Disposition and Development Agreement (DDA) dated October 29,
1996 between MDA-San Bernardino Associates ( Developer or MDA) and the Redevelopment
Agency of the City of San Bernardino (Agency) requires the Developer to do the following:
"d. Prior to submitting documents and evidence to the Agency as required
by this Section, the Developer shall obtain approval by its lender of the Project and/or
the improvements to the Retail Parcel of the transaction as provided in this Agreement.
In the event that said lender selected by the Developer disapproves of the transaction as
provided in this Agreement, the Developer shall in good faith use its best efforts to obtain
the necessary financing for the Project and/or the improvements to the Retail Parcel, from
other lender or lenders who approve thereof."
Attached hereto is a 2+page letter from GMAC Commercial Mortgage to Mr. Rex Swanson
of MDA-San Bernardino Associates LLC. The letter concludes with the following sentence on page
3:
"Nothing contained herein shall be deemed an approval of either the Permanent
Commitment or Construction Commitment, until each is approved by the
appropriate Loan Committee and final loan documents acceptable to GMAC
Commercial Mortgage Corporation have been prepared...."
It would appear from GMAC's letter to Mr. Swanson that the requirements in Section 2.17d.
in the DDA have not yet been complied with by the Developer prior to proposed
Council/Commission action. There is a provision in the DDA commencing on page 50 which deals
with the giving of notice of default and the ability to commence curing same within thirty (30) days
of receiving such written notice.
As I understand the proposed financing process, the Secretary of Housing and Urban
Development (HUD) is authorized under 42 United States Code 5308 (commonly referred to as
Section 108) to issue letters of guarantee for appropriate projects. The proposed Cinema Theater
Project would be one such project. While the City of San Bernardino is the entitlement jurisdiction,
there is proposed an arrangement with the EDA which will result in financing from Chase
Manhattan Bank for seven(7) million dollars based upon this letter from HUD. The EDA would
repay the money borrowed from its share of the revenues generated when the theater project is up
and running. HUD would have a security interest in the project in the form of a second mortgage
for the $7 million(the EDA would assign its $7 million to HUD).
The Developer,presumably obtaining its financing from GMAC, is borrowing$3.6 million.
GMAC will have a first mortgage on the property in question. The theater tenant is borrowing
approximately $2.5 million for improvements within the structure. The EDA has also booked in
next year's budget approximately$1.3 million for equity contributions to the project, which would
be secured by a third trust deed on the property.
The biggest exposure period to the City/EDA would appear to be during construction period.
The money is being drawn down from Chase Manhattan Bank for such construction,but no revenue
has yet been generated. If the project were to fail at this point in the process, there would be no
revenue to repay Chase Manhattan. In such a case, the bank presents what is owed by us to HUD
and HUD pays it as a result of its previously mentioned loan guarantee and then HUD "comes after
us." HUD will accomplish this by simply withholding future years' CDBG allocation to the City
until what it has paid out to Chase Manhattan is recouped.
Another exposure period is after the project is completed, commences operation and then
ceases because it cannot make a profit. This could occur if the theater misses this years' Christmas
season(normally, from what I understand, a busy season). I do not know whether or not that time
line is in jeopardy.
The bottom line appears to be that GMAC is protected because it will have a first mortgage
on the property for the$3.6 million which it is loaning. HUD is clearly protected because it not only
will have a second mortgage on said property, but has easy access to recoup any losses by simply
withholding CDBG money the City would otherwise get in future years.
Section 5 of the Resolution of the Mayor and Common Council authorizes and directs the
City Attorney to submit an approving legal opinion with respect to the transaction contemplated
under HUD Section 108 Loan Agreement.
On page 15 of the Resolution of the Community Development Commission, it requires that
Borrower's counsel issue a letter to the Secretary of HUD that various documents referenced on the
prior page (page 14) are valid and legally binding obligations. On page 17 of said Resolution, the
Chair of the Commission and the Agency Secretary are authorized and directed to execute on behalf
of the Agency various documents listed on page 16,together with such conforming changes to each
document as may be necessary or appropriate to conform to the requirements set forth in the
enumerated documents.
attachment
6-12-1998 10:30M FROM METROPOLITAN DEV 3104168711 P. 3
W141" rju W*3 rid sit 04S atilj 68416 vwc
G"c
V=p FL QWbW tW
am go VIM Pe+ssI"c
Ju�w 12, 1991
I=$ wow=
UM As BerrArdisao Associabs LtC
CIO M99WOAa perdopmcut
300 Cnnti Boulmd,Snit 360
B!Sermdo,Ca1amia 90343
JM* CitAnWStst Tbg=r
Ssa Bermardtno,CA
DM Nk.SvransoA:
The pur70M of this latter is to sclmawladge the recaps of tits requimd foes totaling 533.000
hVM MDA•Sae Remardmo Associates LLC is caafwmi=e with your appbcxdon of Msrah
10 1948,for a Forward CotnmA meta for a pmt loco std your appbcation dst+ed M=It
12,1998,fora first Mortpp CQl'3>lttllct M t own. Fu r&W dga letter v4j sw , I's I tltt
90nMVl arms of the ffinacing appiicd for subject to Me final teeats and 000diriot>1t oamcakwd in
fie f' d loan dock.
C{71�)!STRUCTIDN LOAN
Construction Loam 53,600,000
l;tterest Rate Two WW one half pemeat(2.5%)over tits
30 day LIBOR.
Ter= Twelve(M months with one six(6)
month exansioa
Coumdttamt Fee 2%of the Prbwipd smrotrnt of the loan oa
MOt10.
Name of Banw r MDA Son Battadiuo Axwc?atm LLC, a
Detavrue Limited Liability Company
100 South Wac w Or" a Suit 400 • Cho go,!L aM06 a 312-8454M • Fax 3124454M
6-12-1998 10:30AM FRDM NETRt7P0t_ITAN DEV 3104185711 P. a
Villslfli 14U 10:" bru 412 ash 41021 t " t UML x16. CUU4
Specific Taws sad C*ditioas of Cmskuction I Q=
• An exeauaed act low f>com C"saesasStar Luxury TlaOOm.Inc. ix that irttpravtnents,a 25
year teem and scrawl reabl psymemb ofaot loss than$1,328,000 aid often terms and
,o-ft ns acceptable to GMACCM.
• Rcnaw of aA 4qcuamabtioo of the MM 108 Lam and finds fom the Stn Beralydino
Rtdeveaop�t A=atcy. A9 Dams and ccndib=s avicepWM#to GMACCM.
• GMACCM shag heve a ri&of fist refaad to fauanoa the read Component of tha
dsvdvpment.
• A 3350.000 Soaoaer tad itst�zaat scaacvo ituluded m the oA cost is additioa
to GMACCM's iypmd ranvismsomMy oalcakied at undw-ram!.
• GXACCM wr$d be=sipW tl w Doerowsr's t ig=wader t9te Agreement Vbh the ftsu y Do
talnc title:Do the tsrs+l psaeeia and ccaumrtta the retail spats i[the Borrower dCt�aultst under
dw cuam ction Lana a use such dW as the BotroNt r=or&a Wpm*lots foe to
Teem space*Vh aMOM leydw.
PfiRMAxM YAANN
Lam Amount S31tS00,000
Furpose POwand Coaa:ulnuat to rc&mcc CMACCM
it vct cn loan.
Term 10 years
At wt=tion 20 years
kmerest Raft 230 be=pomis"the Index
ladtx
no Bencibmark 10 year United States Tmm y
Sectuity
CounniRnent Fee 1'16 of rho principei amount of tea Loots or$36,000
Ba no ver Baavwcr will be a Mgle purp0s0 m6ty("SP'E")
lb,"ed tacalusively foz the purpose of owning and
apwAlns the property tad shaD be prohbked bam
avaging in WO,other business activity er inenesatg
any other liability other dm the Loan and tbose
a=ociuted wli&routine Properly opevWng expt wn
and rapircd eapai iotprore=aonte to the Property
("the SPE Cor==b") A subsI- Yes non-
Coaaolidation opkima may be roqubv&
b—t'd—I td 2S I f0-.i I AM t•KLIM MM I KUNJL l I AN Ur-V 3(Ud I tiff/I I P. 5
09I1L/40 !ILL 1r:" #A& ili Ns 4as.1 Wt. ULPI tL 111. WUUG
Fr'r t*w&-aik ae b the lams and c0ndffim related W*a emwicIIOa Im and the pu=aes m
low are conwoed iat the Appbatioal for Foawazd Cammitmelat ft a Pecmeoent Loan dated
Mumb 10,1998 and the Appbcadm to GMAC C=mwrcial B&Mpp Cmpwi&n For s F m
Molr two e ConswuW n Lost am by You as X=b 12,1M.Notltia8 00=und bavin
elt H be deemed m Vpvval of Odw the PW=OWCQMWlwM or CcttMxdm
Cvmmimj�unto wwa is gVrand by dw ap Waprim Loan Committee and ftd loan
documoeets aceaptobk t0 GKAC cmmft+cW W& pp Ca7ara0m have beet prepared.
Pkaee call tae sbeaM yvn hsve my q re6sladia8 t6ts sdorsaa>iot.
GblAC COanat Carpo[atiaaz.