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87951 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 RESOLUTION NO. 8.795 A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE ALL NECESSARY DOCUMENTS TO OBTAIN A SECTION 108 LOAN GUARANTEED BY FUTURE CDBG ENTITLEMENT GRANTS FROM THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT; IN FURTHERANCE OF RESOLUTION NO. 8,437. 554 WHEREAS, Resolution No. 8,437 (April 16, 1991) authorized the City Manager to complete and file an application with the U.S. Department of Housing & Urban Development for a $1,800,000 loan guaranteed by future CDBG entitlement grants under Section 108 of the Housing & Urban Development Act, Title I; and WHEREAS, the application was approved on September 25, 1991. NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE CITY OF LITTLE ROCK, ARKANSAS: SECTION 1. The City Manager is hereby authorized to execute all necessary documents, including, but not limited to, promissory notes payable as to principal and interest with future federal CDBG grant monies, contracts, and fiscal agency agreements. SECTION 2. This resolution is adopted in furtherance of Resolution No. 8,437 (April 16, 1991). ADOPTED: October 6, 1992 ATTEST: i ���� , ROBBIE W"CUCK CLERK CITY APPROVED AS TO FORM: APPROVED: -'il• � i • M 0�1 � M M M 0 I NOTE NUMBER: B- 91 -MC -05 -0004 BORROWER: City of Little Rock, Arkansas COMMITMENT AMOUNT: $245,000.00 INTERIM INTEREST RATE: As set forth below. NOTE DATE OF NOTE: CUSIP NUMBER: 555 MATURITY DATE: August 1, 1993 PUBLIC OFFERING DATE: PRINCIPAL AMOUNT: REGISTERED PUBLIC OFFERING HOLDER: AFTERWATCH & CO INTEREST RATE: As Nominee for Federated Short -Term U.S. Government Trust For value received, the undersigned, City of Little Rock, (the "Borrower ", which term includes any successors and assigns), a public entity organized and existing under the laws of the State of Arkansas, 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. w 556 This Note shall be delivered on or prior to the Public Offering Date (as hereinafter defined) in fully registered form to Chemical Bank as Fiscal Agent (the "Fiscal Agent ") pursuant to the terms of the Series 1992 -A Fiscal Agency Agreement (the "Fiscal Agency Agreement "), dated as of , 1992 between the Fiscal Agent and the borrowers specified therein, including the Borrower. The terms and provisions of the Fiscal Agency Agreement, insofar as they affect the rights, duties and obligations of the Holder, are hereby incorporated herein and form a part of this Note. The Fiscal Agency Agreement provides for the Fiscal Agent to perform certain duties, including duties of paying agent, registrar and calculation agent for this Note. This Note may be surrendered to the Fiscal Agent for registration of transfer or exchange, as provided in the Fiscal Agency Agreement. The Fiscal Agent shall permit reasonable inspection to be made of a copy of the fiscal Agency Agreement kept on file at its corporate trust office. From the date of each Advance to the Public Offering Date, interest shall be paid quarterly on the unpaid principal balance of each Advance on the first day of February 1, May 1, August 1 and November 1 (each, an "Interim Payment Date "), commencing on November 1, 1992, and also shall be paid on the Public Offering Date, if any. The amount of interest payable on each Interim Payment Date will represent interest accrued during the three - month period ending immediately prior to such Interim Payment Date, or in the case of the first Interim Payment Date, the period from the date of this Note to the first Interim Payment Date. The amount of interest payable on the Public Offering Date will represent interest accrued during the period from the last Interim Payment Date to the Public Offering Date. The initial interest rate for each Advance will be set on the date of such Advance and will be equal to 20 basis points (.2%) above the Applicable LIBO Rate (as hereinafter defined) and thereafter will be adjusted monthly on the first day of each month (each, a "Reset Date ") to an interest rate equal to 20 basis points (.2B) above the Applicable LIBO Rate. "LIBO Rate" for any given Business Day means, except in the case of manifest error, the interest rate per annum published on that day in the Eastern Edition of The Wall Street Journal or any successor publication ( "WSJ "), published by Dow Jones & Company, Inc., in the section titled "Money Rates" (or any successor section) and opposite the caption "London Interbank Offered Rates (LIBOR) -- three months" (or any successor caption). If such rate does not appear in WSJ, for each interest period, 3 -month LIBOR shall be the interest rate, converted to a bond - equivalent yield basis, for deposits in U.S. dollars for three months which appears on Telerate Page 3750 or such other page as may replace Page 3750 on that service or such other service or services as may be nominated by the British Bankers, Association for the purpose of displaying such rate (together, "Telerate Page 3750 ") as of 11:00 a.m., London time, on the day (the "Determination 2 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, 1992, interest from and after such December 31, 1992 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, 1993 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 M s 558 under then prevailing market conditions as of the Public Offering Date at one hundred percent (100 %) of the aggregate amount of all Advances owing hereunder (the "Principal Amount ") as specified on the face of this Note. From and after the Public Offering Date, interest at the Public Offering Interest Rate shall be paid on February 1 and August 1 of each year (each, a "Payment Date "), commencing 19 and on the Maturity Date as specified on the face of this Note. Interest payable on or before the Public Offering Date shall be calculated on the basis of a 360 -day year and the actual number of days elapsed. Interest after the Public Offering Date shall be calculated on the basis'o'f a 360 -day year consisting of twelve 30 -day months. The Principal Amount of this Note shall be repaid on the Maturity Date. If any Payment Date or Maturity Date is not a Business Day, then payments payable on such Payment Date or Maturity Date shall be made on the next Business Day. "Business Day" means a day on which banking institutions in New York City 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 of principal and interest shall be made in the manner and as provided in the Fiscal Agency Agreement. If a payment of principal or interest herein provided for shall not be made by the close of business on the second Business Day (as herein defined) next succeeding an Interim Payment Date or a Payment Date, as the case may be, interest shall accrue on the amount of such payment at the then applicable interest rate payable on this Note, from the relevant Interim Payment Date or Payment Date, as the case may be, until the date such Payment is made. Nothing in the immediately preceding sentence shall be construed as permitting or implying that the Borrower may, without the written consent of the Holder and the Secretary, modify, extend, alter or affect in any manner whatsoever the right of the Holder to receive any and all payments of principal and interest specified in this Note. This Note evidences indebtedness incurred pursuant to and in accordance with a Contract for Loan Guarantee Assistance (the "Contract ") and any amendments thereto, between the public entity named therein, if other than the Borrower, the Borrower and the Secretary, pursuant to section 108 of the Housing and Community Development Act of 1974, as amended, 42 U.S.C. S 5308 (the "HCD Act "). This Note is subject to the terms and provisions of the Contract, to which Contract reference is hereby made for a statement of such terms and provisions, including a description of the collateral security for this Note. The payment of principal and interest when and as due on this Note in accordance with its terms is unconditionally guaranteed by the Secretary to the Holder (the "Guarantee "). The Secretary's Guarantee shall be 4 559 executed 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 (1008) of the unpaid 5 560 principal amount to be prepaid, plus accrued interest thereon to the date of prepayment. Partial prepayments shall be credited against the Principal Amount. The Commitment Amount shall be reduced in the amount of any such prepayments. A default under this Note shall occur upon the failure by the Borrower to pay when due principal or interest on this Note. The Borrower hereby waives notice of default and opportunity for hearing for failure to make a payment when due. In addition, the Secretary may declare the Borrower in default under this Note if the Secretary makes a final decision in accordance with the provisions of 24 C.F.R. S 570.913 (or any successor regulation thereof), including requirements for reasonable notice and opportunity for hearing, that the Borrower has failed to comply substantially with Title I of the HCD Act. 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 hereunder, and request the Borrower's financial institution to refuse to honor any instruments drawn upon, or withdrawals from the Guaranteed Loan Funds Account (as defined in the Contract) or to release obligations and assignments from the Guaranteed Loan Funds Investment Account (as defined in the Contract), pending the Secretary's final decision. Until the Public Offering Date, upon the occurrence of a default, the then outstanding principal sum of this Note together with accrued interest thereon may be declared due and payable by the Secretary in the manner and with the effect provided in the Contract. Following a default by the Borrower under the terms of this Note, the Holder agrees to rely wholly and exclusively for repayment of this Note upon the Guarantee. The enforcement of any instruments or agreements securing or otherwise related to this Note shall be the sole responsibility of the Secretary, and the Holder shall not be responsible for the preparation, contents or administration of such instruments and agreements, or for any actions taken in connection with such instruments and agreement. The Holder, to the extent it is legally able to do so, shall bind or cause to be bound its successors and assigns to all limitations imposed upon the Holder by this Note. The Borrower hereby waives any requirement for presentment, protest or other demand or notice with respect to this Note. This Note is issued, executed, and delivered on behalf of the Borrower by its authorized official as an obligation guaranteed by the Secretary pursuant to Section 108 of the HCD Act. 0 r it IN WITNESS WHEREOF, the undersigned, as an authorized official of the Borrower, has executed and delivered this Note. ATTEST: By: (Signature) Name (Title) "rl 561 City of Little Rock, Arkansas_ BORROWER By: (Signature) (Name) (Title) r r r r r. r r r� ■� ... r 562 ASSIGNMENT AND TRANSFER For value received, the undersigned assigns and transfers this Note to (Name and Address of Assignee) (Social Security or Other Identifying Number of Assignee) and irrevocably appoints attorney -in -fact to transfer it on the books kept for registration of the Note, with full power of substitution. Dated: the Signature Guaranteed: Qualified Financial Institution By: Authorized Signature 0 Note: The signature to this assignment must correspond with the name as written on face of the Note without alteration or enlargement or other change. Note Number: B- 91 -MC -05 -0004 Date of Note: Maturity Date: August 1, 1993 Commitment Amount: $245,000.00 Borrower: City of Little Rock, Arkansas Registered Holder: Advance Number: Amount of Advance: Date Made: Initial Interest Rate: Advance Number: Amount of Advance: _ Date Made: Initial Interest Rate: Advance Number: Amount of Advance: Date Made: Initial Interest Rate: Advance Number: Amount of Advance: Date Made: Initial Interest Rate: Advance Number: Amount of Advance: Date Made: Initial Interest Rate: Advance Number: Amount of Advance: _ Date Made: Initial Interest Rate: Advance Number: Amount of Advance: Date Made: Initial Interest Rate: RECORD OF ADVANCES 91 Authorized Official Name: Title: Name: Title: Name: Title: Name: Title: Name: Title: Name: Title: Name: Title: 563 Note Number: B- 91 -MC -05 -0004 Date of Note: Maturity Date: August 1, 1993 Commitment Amount: $245,000.00 Borrower: City of Little Rock, Arkansas Registered Holder: RECORD OF PAYMENTS Principal Interim Payment Payment Interest Principal Applied to Dater Paid Paid Advance Number Authorized Official Name: Title: Name: Title: Name: Title: Name: Title: Name: Title: Name: Title: Name: Title: Name: Title Name: Title: Name: Title: Name: Title: Name: Title: Name: Title: Name: Title: Name: Title: 5 6) 4 3 Includes also the Public Offering Date or _19`, if the Public Offering Date has not occurred by such _ 10 !� r� r r r r� r� r■ e r r .r 565 Note Number: B- 91 -MC -05 -0004 Date of Note: Maturity Date: August 1, 1993 Commitment Amount: $245,000.00 Borrower: City of Little Rock, Arkansas Registered Bolder: . RECORD OF INTEREST RATES Initial Interest Rate Date: , 19_ LIBO Rate as of two London Banking Days preceding , 19_ 8 Initial Interest Rate: % Authorized Official: Name: Title: Reset Rates LIBO Rate as of two Applicable London Banking Days Interest Reset Date preceding Reset Date Rate 11 Authorized Official Name: Title: Name: Title: Name: Title: Name: Title: Name: Title: Name: Title: Name• Title: Name: Title: Name: Title: Name: Title: Name: Title: Negotiated Rate after 19 Date: , 19 Interest Rate or Interest Rate Formula: First negotiated rate: Authorized Official: Name: Title: Subsequent rates (if any) 12 This Contract for Loan Guarantee Assistance ( "Contract ") is entered into between City of Little Rock, Arkansas, as 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- 91 -MC -05 -0004, all notes substituted as provided in the original Note, and any additional notes issued pursuant to the loan guarantee commitment dated September 25, 1991 (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 gives 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. (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. CONTRACT FOR LOAN GUARANTEE ASSISTANCE UNDER SECTION 108 OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1974, AS AMENDED, 42 U.S.C. 55308 Date of Contract This Contract for Loan Guarantee Assistance ( "Contract ") is entered into between City of Little Rock, Arkansas, as 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- 91 -MC -05 -0004, all notes substituted as provided in the original Note, and any additional notes issued pursuant to the loan guarantee commitment dated September 25, 1991 (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 gives 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. (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 maintained for the Guaranteed Loan Funds. Such Letter Agreement must be executed when the Guaranteed Loan Funds Account is established. (A fully executed copy of such Letter Agreement shall be submitted to the Secretary within thirty days of its execution.) The Borrower is authorized to make withdrawals from said account only for the payment of the costs of approved activities or for the temporary investment of funds. Investments shall be limited to Government Obligations, as defined in paragraph 10, having maturities that are consistent with cash requirements of the approved activities. In no event shall the investments mature on or after July 31, 1994, or have maturities which 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 "Guaranteed Loan Funds 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 Guaranteed Loan Funds Account. The Guaranteed Loan Funds Investment Account need only be established if and when the Borrower invests the Guaranteed Loan Funds in Government Obligations. Such Letter Agreement must be executed when the Guaranteed Loan Funds 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 Guaranteed Loan Funds Account. All funds in the Guaranteed Loan Funds Account must be disbursed by the Borrower for approved activities by July 31, 1994. Any funds remaining in the Guaranteed Loan Funds Account after this date shall be immediately transferred to the Loan Repayment Account. 56 8 (b) Borrower shall by the fifteenth day of- -each month provide the Secretary with a written statement showing the balance of funds in the Guaranteed Loan Funds Account and the withdrawals from such account during the preceding calendar month and a statement identifying the obligations and their assignments in the Guaranteed Loan Funds Investment Account. (c) Upon a declaration of Default by the Secretary, all right, title, and interest of the Borrower in and to the Guaranteed Loan Funds Account and Guaranteed Loan Funds w ■� �■ w w w w w w� Investment Account shall immedi, Secretary for use in the making Notes or purchase of Government accordance with paragraph 10. ■w w w w w w� 569 itely vest in the of payment due on the Obligations in 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 .r 6. M M M M M M M M M issuance of the notes, the pledge of grants pursuant to 24 C.F.R. S570.705(b)(2) is valid, there is no outstanding litigation that will affect the validity of the notes, and the fiscal agency agreement is a valid, binding, and enforceable obligation of the Borrower. If the Borrower fails to reimburse the Underwriters as provided in this paragraph, the Secretary may pay the amount of the reimbursement from funds pledged pursuant to paragraph 5(a). The Borrower hereby pledges as security for repayment of the Notes the following: (a) All grants which have been made or for which the Borrower may become eligible under Section 106 of Title I. (b) Program income, as defined at 24 CFR Section 570.500(a), directly generated from the use of the Guaranteed Loan Funds. (c) Other security: (d) All proceeds (including insurance and condemnation proceeds) from any of the foregoing. (a) All amounts pledged pursuant to paragraphs 5(b), 5(c), and 5(d) shall be deposited immediately on receipt in a separate identifiable custodial account (the "Loan Repayment Account ") with a financial institution whose deposits or accounts are Federally insured. The 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 Loan Repayment 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 maintained for such pledged funds. The Loan Repayment Account need only be established if and when the Borrower receives amounts pledged pursuant to paragraphs 5(b), 5(c) or 5(d). Such Letter Agreement must be executed when the Loan Repayment Account is 570 7. • 571 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. Any grants available to the Borrower under Section 106 of Title 5 w w �■ w w w w �w w w w■ � ■� � w 5"72 I (including program income derived therefrom) are authorized to be used by the Borrower for payments due on the Notes, or for the purchase of Government Obligations in accordance with paragraph 10. Upon a determination by the Secretary that payments pursuant to the requirements of paragraph 2 and paragraph 4 are unlikely to be made as specified, the Secretary may limit the availability of grants pledged pursuant to paragraph 5(a). Such limitation shall be in an amount estimated by the Secretary to be sufficient to ensure such payments are made when due and may be effected by withholding amounts at the time such grants are approved or by disapproving payment requests submitted with respect to such grants. 9. The Secretary may use grants withheld pursuant to paragraph 8 to make payments required by paragraph 2 and paragraph 4 if such payments have not been made by the Borrower. 10. For purposes of this Contract, the Notes shall be deemed to have been paid if there shall have been deposited with the Fiscal Agent either moneys or Government Obligations, which in the sole determination of the Secretary, mature and bear interest at times and in amounts sufficient, together with the moneys on deposit with the Fiscal Agent for such purpose, to pay when due the principal and interest to become due on the Notes. All of the Notes or all Notes of any maturity may be so defeased, provided that all Notes having the longest maturities are defeased before those with shorter maturities. If any Note defeased is subject to redemption, the due date of all the principal due on the Note on the date of defeasance shall be assumed to be the earliest possible redemption date under the terms of the Note, for purposes of calculating the amount of money on government obligations to be deposited with the Fiscal Agent. If all Notes guaranteed pursuant to this Contract shall be deemed to have been paid, then the Borrower shall be released from all agreements, covenants, and further obligations under this Contract. "Government Obligation" means 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 interest on direct obligations of, or obligations unconditionally guaranteed by, the United States of America, which obligations are held in trust by a commercial bank which is a member of the Federal Reserve System and has capital and surplus (exclusive of undivided profits) in excess of $100,000,000. This privilege of defeasance shall be limited to Notes in existence after a public offering. 11 573 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) comply with any of the other security requirements specified in paragraphs 5(c). (b) The Borrower waives 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 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. (c) The Secretary may withhold approval for any or all further Advances under the Notes. (d) Until the Public Offering Date, the Secretary may accelerate the Notes. 7 M M M M 574 (e) The Secretary may exercise any other appropriate remedies or sanctions authorized under laws or regulations applicable to the assistance provided under this Contract, or may institute any other action authorized by law to recover Guaranteed Loan Funds from amounts pledged under this Contract. 13. The Contract and the Notes are hereby incorporated in and made a part of the Grant Agreement authorized by the Secretary on June 26, 1991 under the Funding Approval for grant number B- 91 -MC -05 -0004 to the Borrower. 14. The Borrower's liability for amounts due pursuant to the terms of the Notes shall be limited to the security pledged in paragraph 5 of this Contract. 15. Special Conditions and Modifications: [ ] Check if continued on extra sheet and attach. 0 on ion r� r rr r r r■ � � 575 IN WITNESS WHEREOF, the undersigned, as authorized officials of the Borrower and the Secretary, have executed this Contract for Loan Guarantee Assistance. ATTEST: (Name) (Title) (Signature) City of Little Rock, Arkansas BORROWER BY: (Name) (Title) (Signature) (Date) SECRETARY OF HOUSING AND URBAN DEVELOPMENT BY: Q (Date)