HomeMy WebLinkAboutContract 24177 NO
STATE OF TEXAS
COUNTY OF TARRANT §
THIS contract is made and entered into by and between the City of Fort Worth("City"), acting and
through Ramon GuaJardo, its duly authorized Assistant City Manager, and FWEDC ("Contractor"),
by and through Danny Coleman, its duly authorized President. Contractor's business address is 100
East 15" Street, Suite 500-136, Fort Worth, Texas 76102.
WHEREAS, the City of Fort Worth has been notified that it will receive Section 108 Loan funds
from the United States Department of Housing and Urban Development("HUD"); and,
WHEREAS,the primary purpose of the Section 108 Loan Program is to provide low-interest loans
to businesses which employ low and moderate income citizens of Fort Worth; and,
WHEREAS,the citizens of Fort Worth,the Community Development Council, and the City Council
of Fort Worth have determined that Economic Development Programs are needed by low and
moderate income citizens of Fort Worth;
NOW, THEREFORE, THIS AGREEMENT FURTHER WITNESSETH: THAT, the parties
covenant and agree as follows:
1. SCOPE OF SERVICES
a. Contractor will deliver loan origination services to citizens of the City of Fort Worth under
the program name Mercado Fort Worth Program("Program"), from I July 1998 to 30 June
2001 in accordance with applicable laws and special conditions set forth in the contract for
loan guarantee assistance between HUD and the city.
b. Contractor will provide loan portfolio management services for a period equal to the life of
the loans completed under this program and comply with the contract for loan guarantee
assistance in Attachment IV.
c. Contractor will perform job tracking services related to this program following job tracking
procedures outlined in Attachment 111.
& Contractor agrees to meet the National Objective of activities that will benefit low and
moderate income individuals through job creation/retention or area benefit and to maintain
full documentation supporting fulfillment of the National objective in its files.
e. City will monitor the performance of the Contractor against the goals and performance
standards required herein. Substandard performance as determined by City will constitute
non-compliance with this Agreement. If action to correct such substandard performance is
not taken by Contractor within thirty (30) days after being notified in writing by City,
contract suspension of termination procedures will be initiated.
2. PAYMENT
a. The contractor is required to collect a $250.00 loan application fee from the borrower prior
to consideration of loan application.
b. City will reimburse Contractor for customary office costs, such as staff time, obtaining
financial reports,and filing fees in an amount up to$10,000 on a$250.00 per loan application
basis. Payment will be processed by City following receipt from Contractor of the Sub-
Grantee's Request For Funds (Attachment I &11).
c. Contractor agrees to keep all Section 108 monies, received in the form of loan repayments,
on hand in interest bearing accounts. All interest earned shall be reported to City on a monthly
basis, at the same time as submission of monthly report following the end of the contract
month during which the interest was earned. These amounts must be reported on the monthly
financial statements filed pursuant to this contract.
d. Repayment of Section 108 proceeds to the City shall be made on a quarterly basis. Contractor
will not commingle Section 108 or CDBG monies with any other funds in any manner that
would prevent City from readily identifying program expenditures for operation of the
Program.
e. The City acknowledges that the Contractor will assess a one and one-half percent(1.5%)loan
processing fee and other fees such as appraisal, title insurance,etc.,to the borrower upon loan
approval. This fee may be collected at the time of the closing or added to the total loan
amount, at the option of the borrower.
f. The Contractor will also assess a one-half percent (0.5%) loan servicing charge to all
approved borrowers monthly, based on outstanding loan balances.
3. UNIFORM ADMINISTRATIVE REQUIREMENTS AND PROGRAM MANAGEMENT
STANDARDS
a. Financial Management
i. Accounting Standards
The contractor agrees to comply with OMB Circular A-110 and agrees to adhere to the
accounting principles and procedures required therein, utilize adequate internal controls,
and maintain necessary source documentation for all costs incurred.
ii. Cost Principles
Contractor shall administer the Program in conformance with OMB Circular A-122,"Cost
Principles for Non-Profit Organizations"and attachments and revisions thereto,regarding
principles for determining,cost for the Program.
b. Documentation and Record Keeping
i. Requirement
Contractor Shall maintain all records pertinent to the activities to be funded under this
Agreement required by HUD regulations specified in 24 CFR 570,506. In addition,
Contractor agrees to keep records to fully document all expenditures charged to the
Section 108 program. The documentation must support the arnownts -charged to Program
and demonstrate that the expenditures were appropriate to the stated goals of the Program
and allowable under applicable federal, state and City guidelines.
ii. Retention
(1) All records pertaining to Program shall be retained for five (5) years following the
date of termination of this contract. Contractor may destroy Program records at the
end of this five (5)year period if no outstanding audit finding exists.
(2) Contractor will retain Program loan records until five (5) year after the expiration
of the loan.
iii. Property Records
The Contractor shall maintain real property inventory records which clearly identify
properties purchased, improved, or sold. Properties retained shall meet eligibility criteria
and shall conform with 24 CFR 570.505.
iv. Close Outs
The Contractor's obligation to the City shall not end until all close-out requirements are
completed. Activities during this close-out period shall include, but are not limited to:
making final payments, disposing of program assets (including the return of all unused
materials, equipment, unspent cash advances, program income balances, and accounts
receivable to City), and determining the custodianship of records.
v. Audits and Inspections
(1) City, HUD, and the United States Comptroller General, or their representatives,
shall have access to any books, documents, records and papers relating to the
operations of Contractor under this Agreement for the purpose of audit,
examination, exception and exception at all reasonable hours at all offices of
Contractor.
(2) For all contracts in the amount of$300,000 or more, Contractor must submit to City
an annual audit prepared in accordance with 24 CFR Sections 570.502 - 570.503
generally,with specific reference to OMB Circulars (with attachments) A-122 and
A-133 as appropriate. The audit may cover either Contractor's fiscal year during
which this contract is in force or cover the period of this contract. The audit must
be prepared by an independent certified public accountant, be completed within
twelve(12)months following the end of the period being audited and be submitted
to City within thirty (30) days of its completion.
(3) City reserves the right to perform an audit of Contractor's program operations and
finances at any time during the to of this contract, if City determines that such
audit is necessary for City's compliance with OMB Circular A-128. Contractor
agrees to allow access to all pertinent materials. If such audit reveals a questioned
practice or expenditure, such questions must be resolved within fifteen (15) days
after notice to Contractor. If questions are not resolved within this period, City
reserves the right to withhold further funding under this and/or future contract(s).
(4) If as a result of any audit it is detennined that Contractor has misused, misapplied
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or misappropriated all or any part of the grant funds described herein, Contractor
agrees to reimburse the (City the atmount,of such monies so misused,misapplied --or
misappropriated; plus the amount of any sanction, penalty or other charge levied
against City because of such misuse, misapplication or misappropriation.
4. REPORTING PROCEDURES
a. Program Income
Contractor agrees that all program income from operation of the Program shall be reported
to the City on a monthly basis and remitted to the City on at least a quarterly basis.
b. Progress Reports
i. Compliance
The Contractor shall comply with City policy concerning the purchase of equipment
and shall maintain inventory records of all non-expendable personal property, as
defined by such policy,procured with funds provided herein.
ii. OMB Standards
The contractor shall procure all materials,property,or services in accordance with the
requirements of OMB Circular A-110,Procurement Standards,and shall subsequently
comply with Attachment N,Property Management Standards as modified by 24 CFR
570.502(b)(6), covering utilization and disposal of property.
5. REVERSION OF ASSETS
Contractor agrees to return to City any Section 108 funds remaining on hand at the end of the
Contract.
6. APPLICABLE LAWS
a. Federal
Contractor agrees to comply with the following laws and the regulations issued thereunder
as they are currently written or are hereafter amended during performance of this contract:
• Title VI of the Civil Rights Act of 1964 (42 USC 2000d et seq)
• Title VIII of the Civil Rights Act of 1968 (42 USC 3601 et seq)
• Executive Orders 11063, 11246, as amended by 11375 and as supplemented by
Department of Labor regulations (41 CFR, Part 60)
• Section 504 of the Rehabilitation Act of 1973 (29 USC 794)
• The Immigration Reform and Control Act of 1986 (Pub. L 99-603, 100 Stat. 33159, as
amended), specifically including the provisions requiring employer verification of the
legal status of its employees
• The Housing and Community Development Act of 1987 (Pub. L. 100-242, 101 Stat.
1815, as amended)
• The Americans with Disabilities Act of 1990 (42 USC 12101 et seq)
b. Other Laws]
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Contractor covenants and agrees that its officers, members, agents, employees,program
participants and subcontractors shall abide by and comply with all other laws, federal,
state and local,relevant to the performance of this contract,including all ordinances,rules
and regulations of the City of Fort Worth and the Housing and Community Development
Act of 1974(Pub. L. 93-383, 885 Stat. 633,), as amended, and all regulations pertaining
thereto. Contractor further promises and agrees that it has read, and is familiar with,terms
and conditions of the Section 108 Loan Program under which funds are granted and that
it will fully comply with same. It is agreed and under-stood that,if City calls the attention
of Contractor to any-such violation of the part of Contract or any of its officers,members,
agents, employees, program participants or subcontractors, then Contractor shall
immediately desist from and correct such violations.
7. NONDISCRIMINATION
a. Contractor,in the execution, performance or attempted performance of this contract and
agreement,will not unlawfully discriminate against any person or persons because of sex,
race, religion, age, disability, color or national origin, nor will contractor permit its
offices, members agents, employees, subcontractors or program participants to engage in
such discrimination.
b. In accordance with the policy of the Executive branch of the federal government,
Contractor covenants that neither it nor any of its officers, members, agents, employees,
program participants or subcontractors,while engaged in performing this contract, shall,
in connection with the employment, advancement or discharge of employees or in
connection with the employment, advancement or discharge of employees or in
connection with the terms, conditions or privileges of their employment, discriminate
against persons because of their age except on the basis of bona fide occupational
qualification, retirement plan or statutory requirement.
c. Contractor further covenants that neither it nor its officers, members, agents, employees,
subcontractors, program participants, or persons acting on their behalf, shall specify, in
solicitations of advertisements employees to work on this contract, a maximum age limit
for such employment unless the specified maximum age limit is based upon a bona fide
occupational qualification, retirement plan or statutory requirement.
d. In accordance with the provisions of the Americans With Disabilities Act of 1990
("ADA"), Contractor wan-ants that it and any and all of its subcontractors will not
unlawfully discriminate on the basis of disability in the provision of services to the
general public, nor in the availability, terms and/or conditions of employment for
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applicants for employment with Contractor, or employees of Contractor or any of its
subcontractors. Contractor warrants it will fully comply with AD A's provisions and any
other applicable federal state and local laws concerning disability and will defend,
indemnify and hold City harmless against any claims or allegations asserted by third
parties or subcontractors against City arising out of Contractor's alleged failure to comply
with the above-referenced laws concerning disability discrimination in the performance
of this agreement.
e. This agreement is made and entered into with reference specifically to the ordinances
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codified at Chapter 17, Article 111, Division 3 ("Discrimination in Employment
Practices ), of the City Code of the City of Fort Worth, and Contractor hereby covenants
and agrees that Contractor, its officers, members, agents, employees and subcontractors,
have fully complied with all provisions of same and that no employee, employee-
applicant or program participant has been discriminated against by the terms of such
ordinances by either the Contractor or its officers, members, agents, employees or
subcontractors.
8. PROHIBITION AGAINST INTEREST
a. No member, officer or employee of City or its designees or agents; no members of the
governing body of the locality in which the Program is situated; and no other public
official of such locality or localities, who exercises any functions or responsibilities with
respect to the Program funded hereunder during his or her tenure of for one year
thereafter, shall have any interest, direct or indirect, in any contract or subcontract, or the
proceeds thereof, for work to be performed hereunder. Contractor shall incorporate, or
cause to be incorporated, like language prohibiting such interest in all contracts and
subcontracts hereunder.
b. No member, officer, employee, or program participant of Contractor or its subcontractors
shall have a financial interest, direct or indirect, in this contract or the monies transferred
hereunder or be financially interested, directly or indirectly, in the sale to Contractor of
any land, materials, supplies or services purchased with any funds transferred hereunder,
except on behalf of Contractor, as an officer, employee, member or program participant.
Any willful violation of the paragraph with the knowledge, expressed or implied, of
Contractor or its subcontractors shall render this contract voidable by the City of Fort
Worth.
9. MINORITY AND WOMEN BUSINESS ENTERPRISE COMMITMENT
Contractor agrees to abide by the City of Fort Worth's policy to involve disadvantaged
business enterprises (M/WBEs) in all phases its procurement practices and to provide them
an equal opportunity to compete for contracts for construction provision of professional
services,purchase of equipment and supplies and provision of other services required by City.
10. NON-ASSIGNMENT
Contractor will not assign any or all of its rights or responsibilities under this contract without
the prior written approval of City. Any purported assignment without such approval will be
a breach of this contract and void in all respects.
IL INDEPENDENT CONTRA CTOR
a. Contractor shall operate hereunder as an independent contractor and not as an officer,
agent, servant or employee of City. Contractor shall have exclusive control of, and the
exclusive right to control, the details of the work and services performed hereunder, and
all persons performing same, and shall be solely responsible for the acts and omissions
of its officers, members, agents, sear ts, employees, subcontractors, program
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participants, licensees or invitee. The doctrine of respondeat superior shall not apply as
between City Contractor, its officer, members agents, servants, employees,
subcontractors, program participants, licensees or invitees, and nothing herein shall be
construed as creating a partnership or joint enterprise between City and Contractor. It is
expressly understood and agreed that no officer,member,agent, employee, subcontractor,
licensee,or invitee of the Contractor,nor any program participant hereunder, is in the paid
service of City and that City does-not have the legal right to control the details of the task
performed hereunder by Contractor, its officers, members, agents, employees,
subcontractors, program participants, licensees or invitees.
b. City shall in no way nor under any circumstances be responsible for any property
belonging to Contractor, its officers, members, agents, employees, subcontractors,
program participants, licensees or invitees,which may be lost, stolen, destroyed or in any
way damaged; and Contractor hereby indemnifies and holds harmless City and its
officers, agents, and employees from and against any and all claims or suites.
12. INSURANCE AND BONDING
a. Contractor covenants and agrees to indemnify, hold harmless and defend, at its own
expense, City and its officers, agents, servants and employees from and against any and
all claims or suits for property loss or damage and/or personal injury, including death, to
any and all persons,of whatsoever kinds or character,whether real or asserted, arising out
of or in connection with execution, performance, attempted performance or
nonperformance of this contract and agreement and/or the operations, activities and
services of the Program described herein, whether or not caused, in whole or in part,by
alleged negligence of officers, agents, servants, employees, contractors or subcontractors
of City; and Contractor hereby assumes all liability and responsibility of City and its
officers, agents, servants, and employees for any and all claims or suits for property loss
or damage and/or personal injury, including death, to any and all persons, of whatsoever
kinds or character, whether real or asserted, arising out of or in connection with the
execution,performance, attempted performance or non-performance of this contract and
agreement and/of the operations, activities and services of the programs described herein,
whether or not caused in whole- or in part, by alleged negligence of officers, agents,
servants, employees, contractors, or subcontractors of City. Contractor likewise
covenants and agrees to and does hereby indemnify and hold harmless City from and
against any and all injury, damage or destruction of property of City, arising out of or in
connection with all acts or omissions of Contractor, its officers, members, agents,
employees, subcontractors, invitees, licensees. or program participants, or caused, in
whole or in part, by alleged negligence of officers, agents, servants, employees,
contractors or subcontrators of City.
b. Contractor will maintain a blanket fidelity coverage in the form of an insurance bond in
the amount of$100,000,to insure against loss from the fraud, theft or dishonesty of any
of contractor's officers, agents trustees, directors or employees. The proceeds of such
bond shall be used to reimburse City for any and all loss of Section 108 monies
occasioned by such misconduct. To effecuate such reimbursement, such bond shall
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include a rider stating that reimbursement for any loss or losses thereunder shall be made
directly to City for the uses and benefit of Contractor.
c. In the case of loan default(s)in this program on loans approved by the Contractor,neither
the Contractor nor the Contractor's agents or officers shall be held financially responsible
for losses sustained by the City in this program; unless the defaults are a result of willful
misconduct or gross negligence on the part of the Contractor, its agents, officers, or
employees.
d. Contractor shall furnish a certificate of insurance as proof that it has secured and paid for
policies of public liability and automobile liability insurance covering risks incident to or
in connection with the execution,performance,attempted performance or nonperformance
of this contract and agreement.
e. The amounts of such insurance shall not be less than the maximum liability which can be
imposed on City under the laws of the State of Texas. Contractor understands and agrees
that such insurance amounts may be revised upward at City's option and that Contractor
shall revise such amounts within thirty (30) days following notice to Contractor of such
requirements.
f. Contractor will submit documentation to City that it has obtained insurance coverage and
has executed bond as required in this contract within thirty (30) days of the executing of
this contract and prior to payment of any monies hereunder.
g. Contractor shall furnish proof that it has secured and paid for workers compensation
insurance and commercial general liability insurance. Requirements under this section
are subject to change upon thirty(3 0) day notice by the City.
13. WAIVER OF IMMUNITY
If Contractor, as a charitable or nonprofit organization, has or claims an immunity or
exemption(statutory or otherwise) from and against liability for damages or injury, including
death, to persons or property; Contractor hereby expressly waivers its rights to plead
defensively such immunity or exemption as against City. This section shall not be construed
to affect a governmental entity's immunities under constitutional, statutory or common law.
14. TERMINATION
a. In addition to, and not in substitution for, other provisions of this Agreement regarding
the provision of public services with Section 108 funds,pursuant to Title I of the Housing
and community Development Act of 1974, as amended, it is expressly understood and
agreed by and between the parties hereto that this agreement is wholly conditioned upon
the actual receipt by City of Federal Section 108 funds; that all monies distributed to
contractor hereunder shall be exclusively from Federal monies received under said grant
and not from any monies of City; and that if such funds under said grant are not timely
forthcoming, in whole or in part City may, at its sole discretion, terminate this contract
and agreement and City shall not be liable for payment for any work or services
performed by Contractor under or in connection with this contract.
b. City may terminate this contract whenever such termination is determined to be in the best
interest of City, in event of Contractor's default, inability or failure to perform or to
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comply with any of the terms herein, or for other good cause. The parties acknowledge
that Section 108 funds paid hereunder are intended to provide only partial funding for
Contractor's program operations. If non-CDBG funds included in the Operation Budget
are not forthcoming to Contractor during the contract term, City may terminate this
contract.
c. Termination will be effected by written notice to Contractor, specifying the portions of
the contract affected and the effective date of termination. Upon Contractor's receipt of
such termination notice, Contractor will:
• Stop work under the contract on the date and to the extent specified by City;
• Cease expenditures of Section 108 monies, except as necessary for completion of the
portions of the contract not terminated; and
• Terminate all orders and contracts to the extent that they relate to terminated portions
of the contract.
d. Contractor will return to City any unused monies previously advanced to City under this
contract within thirty (30) days of the effective date of contract termination. City will
have not responsibility or liability for Contractor's expenditures or actions occurring after
the effective date of contract termination.
15. CERTIFICATE REGARDING LOBBYING
a. The undersigned representative of Contractor hereby certifies,to the best of big or her
her knowledge and belief,that:No federal appropriated funds have been paid of will
be paid,by or on behalf of Contractor, to any person for influencing or attempting to
influence an officer or employee of any agency, a member of Congress, an officer or
employee of Congress or an employee of a member of Congress in connection with
the awarding of any federal contract, the making of any federal grant, the making of
any federal loan, the entering into of any cooperative agreement and the extension,
contiutation, renewal, amendment, or modification of any federal of any federal
contract, grant, loan or cooperative agreement. Contractor shall require that the
language of this certification be included in all subcontracts or agreement involving
the expenditure of federal funds.
b. If any funds other than federal appropriated funds have been paid or will be paid to
any person for influencing or attempting to influence an officer or employee of any
agency, a member of Congress, an officer or employee of Congress, or an employee
of a member of Congress in connection with this federal contract, grant loan or
cooperative agreement, Contractor shall complete and submit Standard Form-LLL,
"Disclosure Form to Report Lobbying," in accordance with its instructions,
16, MISCELLANEOUS PROVISIONS
a. All terms of this contract shall apply to any and all subcontractors of Contractor who are
in any way paid with Section 108 funds or who perform any work in connection with
Contractor's program.
b. The provisions of this agreement are severable, and, if for any reason a clause, sentence,
paragraph or other part of this agreement shall be determined to be invalid by a court or
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federal or state agency, board of commission having jurisdiction over the subject matter
thereof, such invalidity shall riot affect other provisions which car.be given effect without
the invalid provision.
c. The failure of the City to insist upon the performance of any term or provision of this
agreement or to exercise any right herein conferred shall not be construed as a waiver or
relinquishment to any extent of City's right to assert or rely upon any such term or right
on any future occasion.
d. Should any action,whether real or asserted, at law or in equity, arise out of the execution,
performance, attempted performance or nonperformance of this contract and agreement,
venue for said action shall lie in Tarrant County, Texas.
e. This written instrument-and the exhibits attached hereto, which are incorporated by
reference and made a part of this contract for all purposes, constitute the entire agreement
between the parties hereto concerning the work and services to be performed hereunder,
and any prior or contemporaneous,oral or written agreement which purports to vary from
the terms hereof shall be void. Any amendments to the terms of this contract must be in
writing and must be approved by each part to this contract.
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IN WITNESS WHEREOF, the parties hereto I,#ve executed four copies this contract in Fort
Worth,' , m 7 day of � ,
Y�'ortIl Tarrant County, t exas this
A. D. 1998.
CITY OF FORT WORTH FORT WORTH ECONOMIC
DEVELOPMENT CORPORATION
By: y f .
Ramon Guajardo Danny eman
Assistant City Manager President
APPROVED AS TO FO"AND LEGALITY:
Assistant City Attorney Contract Authorization(M&C Number)
0 t
Date Date
ATTEST:
City Secretary
Ii
STATE OF TEXAS
COUNTY OF TARRANT
BEFORE ME, the undersigned authority, a Notary Public in and for the State of Texas, on this day
personally appeared Ramon Guajardo,know to me to be the person whose name is subscribed to the
foregoing instrument and acknowledged to me that the same was the act of the City of Fort Worth
and that he executed the same as the act of City of Fort For the purposes and consideration therein
expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this day of".1
A. D. 1998.
A
Notary Public in and for the State of Texas
SARAH JANE ODLE
NOT PUBLIC
State of Texas
Comm Exp,01-29-2002
STATE OF TEXAS
COUNTY OF TARRANT
BEFORE ME,the undersigned authority, a Notary Public in and for the State of Texas, on this day
personally appeared Mr. Danny Coleman, known to me to be the person whose name is subscribed
to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and
consideration therein expressed, as the act and deed for Fort Worth Economic Development
Corporation and in the capacity therein stated as its duly authorized officer or representative.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this 41, day of u
A. D. 1995.
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Not Puqic in and for the State of Texas
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ATTACHMENT III
CITY OF FORT WORTH
FISCAL SERVICES DEPARTMENT
CONTRACT MANAGEMENT DIVISION
CDBG XXIV
ECONOMIC DEVELOPMENT PROJECT
1.NAME AND ADDRESS OF SuB-GRANTEE 2.PROJECT NAME- MERCADO PROJECT
FORT WORTH ECONOMIC DEVELOPMENT CORP 3.CONTRACT No:
100 EAST 15TH STREET, SUITE 500-136
FORT WORTH,TEXAS 76102 4.DATE OF REQUEST:
MONTH&YEAR
5. PROGRAM SERVICES AND ACTIVITIES
CURRENT
_MONTH CUMULATIVE
Number of Loans Closed:
Number of Businesses\Clients served:
6A. DIRECT BENEFIT DATA{HOUSEHOLD AND/OR PERSONS SERVED)
WHITE BLACK HISPANIC ASIAN PACIFIC AMERICAN TOTAL
NON-HISPANIC NON-HISPANIC ISLANDER INDIAN FEMALE-HEAD-
ALASKAN OF HOUSEHOLD
NATIVE
Current Month
Cumulative
6B. DIRECT BENEFIT (CONTINUED) .. CURRENT MONTH CUMULATIVE
LOW/MOD BENEFICIARIES
Low INCOME BENEFICIARIES
7. LOANS AND JOB/CREATION/RETENTION
a. Loans INTEREST AMORTIZATION
RATE PERIOD(MONTHS) AMOUNT
CDBG Direct Loan:
CDBG Deferred Payment:
CDBG Grant:
CDBG Other:
b, Job Creation/Retention Total Job Count Total Hours Percent of Current Month Cumulative
FIT F[T-LM P/T PIT-LM Low/Mod Jobs Total(Fq) Total(FIT)
Expect to Create: -
Expect to Retain; -
Actually Created: -
Actually Retained: -
S. CERTIFICATION: The undersigned hereby gives assutante that to the best of my knowledge and belief,the data included in this report Is
true and accurate,and if a non-profit agency, has been approved by the governing body of the organization prior to submission,
Date: Submitted by: Phone NI.m:
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Attachment IV
CONTRACT FOR LOAN GUARANTEE ASSISTANCE UNDER
SECTION 108 OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT
OF 1974, AS AMENDED, 42 U.S.C. §5308
Date of Contract June 23, 1998
This Contract for Loan Guarantee Assistance ("Contract" ) is
entered into between the City of Fort Worth, Texas 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-97-MC-48-0010 _, all notes
substituted as provided in the original Note, and any additional
notes issued pursuant to the loan guarantee commitment dated
January 26 , 1. 998 (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.
i . (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 (100-1.) 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
hall
for the full term of deposit. The Borrower shall
in a
promptly deliver to the Secretary an assignment,
form acceptable to the Secretary, of its interest in
such collateral whenever the balance of deposited funds
exceeds such insurance coverage.
INC.
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 December
2000, 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 December 1, 2000.. Any funds remaining in
the Guaranteed Loan Funds Account after this date shall
he immediately transferred 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 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.
Upon a declaration of Default by the Secretary, all
2
right, title, and interest of the Borrower in and to
the Guaranteed Loan Funds Account and Guaranteed Loan
Funds Investment Account shall immediately vest in the
Secretary for use in the making of payment due on the
Notes or purchase of Government Obligations in
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
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) .
5 . The Borrower hereby pledges as security for repayment of the
Notes the following:
(a) All allocations or grants which have been made or for
which the Borrower may become eligible under Section
106 of Title I, as well as any grants which are or may
become available to the Borrower pursuant to Section
108 (q) 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.
(e) All funds or investments in the accounts established
pursuant to paragraphs 1 and 6 of this Contract .
6 . (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 (1000 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 .
4
r
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
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.
5
tc) 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 .
7 . Any grants available to the Borrower under Section 106 of
Title 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. Unless otherwise provided
herein or unless otherwise expressly authorized by the
Secretary in writing, the Borrower shall substantially
disburse funds available in the Loan Repayment Account or
Loan Repayment Investment Account before such funds are
withdrawn from the U.S . Treasury for such purposes_
8 . 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 he deemed to have been paid, then the Borrower shall
be released from all agreements, covenants, and further
6
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 Certifi6ates 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.
(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 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.
7
12. Upon a declaration of Default, the Secretary may exercise
any or all of the following remedies:
(a) The Secretary may continue to make payment 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.
(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 9 , 1997 under the Funding Approval for
grant number B-97-MC-48-0010 to the Borrower.
14 . Notwithstanding any other provision of this Contract or the
Notes, any recovery against the Borrower for any liability
for amounts due pursuant to the Notes and this Contract
shall be limited to the sources of security pledged in
paragraph 5 of this Contract. THE NOTES ARE LIMITED
OBLIGATIONS OF THE BORROWER PAYABLE SOLELY FROM THE SOURCES
OF REVENUE PLEDGED IN PARAGRAPH 5 OF THIS CONTRACT AND ARE
NOT A CHARGE UPON ANY OTHER INCOME OR REVENUES OF THE
BORROWER AND SHALL NEVER CONSTITUTE AN INDEBTEDNESS OF THE
BORROWER. Neither the general credit nor the taxing power
of the Borrower, or of the State in which the Borrower is
located, or of any other political subdivision thereof, is
pledged for any payment due under the Notes or this
Contract.
15. Special Conditions and Modifications:
(X) Check if continued on extra sheet and attach.
8
IN WITNESS WHEREOF, the undersigned, as authorized officials
of the Borrower and the Secretary, have executed this Contract
for Loan Guarantee Assistance.
CITY OF FORT WORTH TEXAS
BORROWER
ATTEST:
Gloria Pearson BY: Bob Terrell
(Naive) (Name)
City Secretary City Manager
(Title} (Title)
(Signature) (Signature,
June 23, 1998
(Date)
SECRETARY OF HOUSING AND URBAN DEVELOPMENT
BY:
(Date)
This is a counterpart signature page to the Contract for Loan Guarantee
A!3sistance dated June 23, 1998 for Note No. B-97-MC-48-O010.
9
IN WITNESS WHEREOF, the undersigned, as authorized officials
of the Borrower and the Secretary, have executed this Contract
for Loan Guarantee Assistance.
CITY OF FORT WORTH, TEXAS
BORROWER
ATTEST: BY:
(Name) (Name)
City Secretary City Manager
(Title) (Title)
(Signature) (Signature)
June 23, 1998
(Date)
SECRETARY OF HOUSING AND URBAN DEVELOPMENT
BY:
June 23, 1998
(Date)
This is a counterpart signature page to the Contract for Loan Guarantee
Assistance dated June 23, 1..998 for Note No. B-97-MC-48-0010.
9
15 Special Conditions and Modifications:
(a) Paragraph 5 (c) of the Contract is amended by deleting
the paragraph as written in its entirety and
substituting therefor the following:
11 (c) Other security, including, but not limited to, all
rights of the Borrower (but none of the obligations of
the Borrower) in and to the "Security Documents" (as
/defined in paragraph 15 (d) hereof) and to the
collateral described therein. If necessary to provide
the Secretary with a valid security interest in such
other security, the Borrower shall execute a security
agreement (the "City Security Agreement") , which City
Security Agreement shall be in a form acceptable to the
Secretary. "
(b) Guaranteed Loan Funds shall be used by the Borrower to
finance loans (individually, a "Business Loan") to one
or more for-profit businesses (individually, a
"Business Borrower") pursuant to 24 CPR §§ 570*.'203 (b)
and 570 .703 (i) .
(c) Each Business Loan, shall be evidenced by a promissory
note (individually, the "Business Note" and,
collectively, the "Business Notes") and a loan
agreement (the "Business Loan Agreement") . The
Business Note and Business Loan Agreement shall contain
such provisions as the Secretary deems necessary. The
Business Loan shall be fully secured by one or more of
the following forms of collateral (collectively, the
"Collateral") .
U) A lien on real property (the "Real Property") ,
established through an appropriate and properly
recorded mortgage (the "Business Mortgage") . The
Business Mortgage shall contain such provisions as
the Secretary deems necessary. The Business
Mortgage may be subordinated to another lien on
the property; provided, however, that the
principal amount of the Business Loan secured by
the Real Property shall not exceed an -amount equal
to 80 percent of the "as improved" appraised
market value, less the outstanding balance on
other indebtedness secured by a mortgage lien of
senior or equal priority on the Real Property.
(ii) A security interest (collectively referred to as
the "Security Interests") in machinery and
equipment ("ME") , accounts receivable, inventory,
and other items of personal property
(collectively, the "Personal Property") . The
10
Security interests may be subordinated to 'another
lien; provided, however, that the principal amount
of the Business Loan secured by the Personal
Property shall not exceed an amount determined as
follows :
(A) , in the case of used M&E, not more than go
percent of the appraised net liquidation value,
less the outstanding balance of other indebtedness
secured by a senior security interest in such M&E;
and
(B) in the case of new M&E, not more than 80
percent of the cost thereof (including
installation) , less the outstanding balance of
other indebtedness secured by a senior security
interest in such M&E; and
(C) in the case of accounts receivable, not more
than 80 percent of the average of the ending
balances of the last three (3) years of accounts
receivable, less the outstanding balance of other
indebtedness secured by a senior security interest
in said accounts receivable; and
(D) in the case of inventory, not more than 50
percent of the average of the ending inventory
balances of the last three (3) years, less the
outstanding balance of other indebtedness secured
by a senior security interest in said inventory.
The Security Interests 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.
(iii) Any and all rights, titles, and interests of the
Business Borrower to any leases covering the Real
Property. Such rights, titles, and interests
shall be the subject of an appropriate and
properly recorded collateral assignment of leases
and rents (the "Collateral Assignment of Leases
and Rents") . The Collateral Assignment of Leases
and Rents shall be in a form acceptable to the
Secretary.
(iv) Any and all rights, titles, and interests of the
Business Borrower in any loan or debt service
reserve accounts established for the purpose of
securing the Business Loan. Such rights, titles,
and interests shall be the subject of a collateral
assignment of interest in loan or debt service
reserve accounts (the "Collateral Assignment of
Interest in Loan or Debt Service Reserve
Accounts") . The Collateral Assignment of Interest
in Loan or Debt Service Reserve Accounts shall be
in a form acceptable to the Secretary.
(v) Such other alternative collateral or security
arrangements as may be requested by the Borrower
and approved by the Secretary in writing.
(d) The Borrower shall select a financial institution
acceptable to the Secretary (the "Custodian") to act as
custodian for the documents specified in paragraphs
15 (e) below (the "Security Documents") . The Borrower
and the Custodian shall enter into a written agreement
containing such provisions as the Secretary deems
necessary. A fully executed copy of such agreement,
with original signatures, shall be forwarded to the
Secretary contemporaneously with the delivery of
documents pursuant to paragraph 15 (e) below.
(e) Not later than five (5) business days after
disbursement by the Borrower of Guaranteed Loan Funds
to a Business Borrower, the Borrower shall deliver to
the Custodian the following (as applicable to that
activity) :
(i) The original Business Note endorsed in blank and
without recourse.
(ii) The original Business Loan Agreement, and an
assignment thereof, which assignment shall be in a
form acceptable to the Secretary.
(iii) The original recorded Business Mortgage signed by
the Business Borrower and an assignment thereof,
in a recordable form but unrecorded, which
assignment shall be in a form acceptable to the
Secretary.
(iv) The original Collateral Assignment of Leases and
Rents and an assignment thereof in a recordable
form but unrecorded, which assignment shall be in
a form acceptable to the Secretary.
12
(v) The original Security Agreement and an assignment.
thereof, which assignment shall be in a form
acceptable to the Secretary.
(vi) The original Collateral Assignment of Interest in
Loan or Debt Service Reserve Accounts.
(vii) Any instruments, documents, agreements, and legal
opinions required pursuant to paragraphs 15 (c) (v) .
(viii) If Guaranteed Loan Funds are used to acquire real
property, an appraisal of the fee simple ownership
interest in the Real Property. The appraisal
shall be completed by an appraiser who is
certified by the state and has a professional
designation (such as "SRA" or "MAI") , and shall
conform to the standards of the Financial
Institutions Reform, Recovery and Enforcement Act
of 1989 ("FIRREA") .
(ix) If Guaranteed Loan Funds are used to acquire used
M&E, an appraisal of its net liquidation value.
(x) A mortgagee title policy, issued by a company and
in a form acceptable to the Secretary, naming the
Borrower as the insured party. The policy must
either include in the definition of the "insured"
each successor in ownership of the indebtedness
secured by the Mortgage or be accompanied by an
endorsement of the policy to the Secretary.
(xi) A certified survey with a legal description
conforming to the title policy and the Business
Mortgage.
(xii) An opinion of Borrower's counsel and/or Business
Borrower's counsel, as appropriate, addressed to
the Secretary and on its letterhead, that:
(A) the Business Borrower is a [corporation]
[partnership] duly organized, validly
existing, and in good standing under the
laws of the state of (insert name of
state] ;
(B) the Business Nate has been duly executed and
delivered by an authorized party and is a
valid and binding obligation of the obligor,
enforceable in accordance with its terms,
except as limited by bankruptcy and similar
laws affecting creditors generally; and
( ) the instruments specified in (ii) through
(vii) above are valid and legally binding
1
obligations, enforceable iin accordance with
their respective terms.
(f) The Borrower covenants that it shall :
W ensure the diligent performance of the usual and
customary functions related to the servicing of
the Business Notes; and
(ii) promptly perfect the Security Interests by filing
a financing statement in accordance with the
requirements of the Uniform Commercial Code and
shall file such additional statements as are
necessary to maintain the perfected Security
Interests .
(g) The Borrower shall promptly notify the Secretary in
writing whenever an event which constitutes a default
under (and as defined in) any of the Security Documents
pertaining to a Business Loan has occurred and has
continued unremedied for a period of 90 days after such
occurrence. Such Business Loan shall be hereinafter
referred to as the "Nonperforming Business Loan. "
However, if a Debt Service Reserve Fund has been
established by the Borrower in an amount sufficient to
satisfy at least one year' s debt service to HUD on the
Nonperforming Business Loan(s) at the date that the
loan(s) become nonperforming, the Borrower shall have
an additional year prior to the required notification
to remedy the default . Notification of a Nonperforming
Business Loan shall be delivered to the Secretary, at
451 Seventh Street, S.W. , Room 7180, Washington, D.C.
20410, Attention: Director, Financial Management
Division, Office of the Assistant Secretary for
Community Planning and Development.
The Borrower shall within 60 days of such notification
take one of the following actions:
(i) The Borrower may replace the Nonperforming
Business Loan with another, performing loan (the
"Replacement Loan") which meets the security
requirements specified in paragraph 15 (c) . Such
replacement shall be effected by delivery to the
Custodian of the Security Documents that would be
delivered if the Replacement Loan were made from
Guaranteed Loan Funds. If the payments of
principal and interest on the Replacement Loan are
insufficient to satisfy the payments that are due
on the Nonperforming Business Loan, the Borrower
shall purchase Government Obligations that mature
and bear interest at times and in amounts
14
sufficient, together with payments due on the
Replacement Lean, to pay when due the principal
and interest to become due on the Nonperforming
Business Loan. Such Government Obligations shall
be deposited in the Loan Repayment Investment
Account.
(ii) If the Borrower elects not to replace a
J Nonperforming Business Loan, the Borrower shall
purchase Government Obligations that mature and
bear .interest at times and in amounts sufficient
to pay when due the principal and interest to
become due on the Nonperforming Business Loan.
(This action shall be required only with respect
to Nonperforming Business Loans that have not been
replaced as provided under (i) above. ) Such
Government Obligations shall be deposited in the
Loan Repayment Investment Account .
(h) Paragraph 12 is amended by adding at the end thereof
the fallowing language:
" (f) The Secretary may complete the endorsement of the
Business Notes and record the assignments referred
to in paragraph 15 (e) , and thereby effectuate the
transfer of the documents referenced and
underlying indebtedness from the Borrower to the
Secretary or the Secretary's assignee.
" (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 15 (d) ) against
the Borrower, against the Business Borrower, or
against any other person or property. "
(i) The Grant Agreement, dated June 23, 1998 , 1998,
for the grant made to the Borrower pursuant to
Section 108 (q) , under grant number
E-96-ED-48-0030, i s hereby incorporated in the
Contract and made a part hereof.
( ) At the option of the Secretary, the Notes shall be
exchanged for a new note to be executed by the Borrower
(the "Replacement Note") repayable in principal
installments at times and in amounts identical to the
maturities of all amounts advanced under the Notes
prior to the date of exchange, unless another schedule
for repayment is agreed to by the Secretary and the
Borrower. To the extent funds pledged pursuant to
15
paragraph 5 (a) of this Contract are sufficient to make
payments at an interest rate that will not exceed the
net effective interest rate payable on public
securities within the meaning of Vernon' s .Texas Revised
Civil Statutes, art . 717k-2 (the "Texas maximum rate") ,
the Borrower shall agree to such revised repayment
schedule. 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 Assistance' containing
such modifications as deemed necessary by the Secretary
to permit the issuance of such trust certificates or
other obligations; provided, however, that Borrower
shall not be obligated to execute and deliver the
Replacement Note if the interest rate to be paid on the
Replacement Note, including any revised repayment
schedule -oermissible' under this paragraph, would exceed
Texas maximum rate .
If the variable interest rate payable (as determined by
the Fiscal Agent with notice to the Borrower and the
Secretary) on the Notes executed contemporaneously -with
this Contract shall exceed on any Reset Date thereunder
the Texas maximum rate, the entire unpaid amount
advanced and all interest accrued to such date on such
advances shall be immediately due and payable from the
sources specified in paragraph 5 of this Contract .
Payment shall be made by the Borrower•at the time
(within five Business Days after such Reset Date) and
in the manner provided in the Fiscal Agent's notice to
the Borrower, and if not so paid, payment may be made
by the Secretary from such sources on behalf of the
Borrower as provided in this Contract.
As additional security for repayment of the Notes, the
Borrower shall :
(i) Deposit $200, 000 from grants pledged pursuant to
paragraph 5 (a) annually on the first day of
August, commencing August 1, 1999 and ending
August 1, 2001 . Deposits shall be placed in the
Loan Repayment Account .
(ii) Pledge all program income, as defined at 24 CFR
Section 570 -500 (a) , generated by the Borrower' s
Home improvement Loan Program. Such pledge shall
be effected through an agreement (the "HILP Pledge
Agreement") , which HILP Pledge Agreement shall be
16
in a farm acceptable to the Secretary.
(iii) Pledge all program income, as defined at 24 CFR
Section 570 .500 (a) , generated by the .Borrower` s
Revolving Loan Fund program. Such pledge shall be
effected through an agreement between the Borrower
and the Fort Worth Economic Development
Corporation, as administrator of the Revolving
Loan Fund program, (the "'RLF Pledge Agreement") ,
which RLF Pledge Agreement shall be in a form
acceptable to the Secretary.
(iv) Deliver the HILP Pledge Agreement and the R.LF
Pledge Agreement to the Custodian specified in
paragraph 15 (d) not later than five (5) business
days after the initial disbursement of Guaranteed
Loan Funds by the Borrower.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
17
ATTACHMENT 3
Legal Description of Real Property
[Borrower shall insert legal description-]
ATTACMIENT 4
Description of Personal Property
[Borrower shall insert legal description.]
r 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
[� 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) .
[) 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
parties other than HUD and to change the name of the aforesaid
account to the ,"United• states Department of Housing and Urban
Development . " In no instance shall the funds in the Custodial
Account be used to offset funds which may have been advanced to, or
on behalf of, the Borrower by the custodian institution.
This letter is submitted to you in duplicate. Please execute
the duplicate copy of the certificate below, acknowledging the
existence of such account, so that we may present the copy signed by
you to HUD.
Name of Borrower
By (Signature)
Title
The undersigned institution certifies to the United States
Department of Housing and Urban Development (HUD) that the account
identified is in existence in this institution under account number
and agrees with the Borrower named above and HUD
to honor demands on such account in the manner provided in the above
letter, subject only to notice requirements contained -in applicable
regulations governing this institution, but in no event to exceed
seven business days . The undersigned institution further agrees upon
the request of HUD to refuse to honor any instruments drawn upon or
withdrawals from such account by parties other than HUD and to change
the name of the aforesaid account to "United States Department of
Housing and Urban Development. " In no instance shall the funds in
the Custodial Account be used to offset funds which may have been
advanced to, or on behalf of, the Borrower by the custodian
institution. Deposits in this institution are insured by the Federal
Deposit Insurance Corporation, the Federal Savings and Loan Insurance
Corporation, or the National Credit Union Administration.
Name of institution By
Title Date
ATTACH11ENT :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. )
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
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 .
You are further authorized upon the request of HUD to refuse to
honor any request for release of the obligations and assignments from
such account by parties other than HUD and to change the name of the
aforesaid account to the "United States Department of Housing and
Urban Development. " In no instance shall the obligations in the
account be used to offset funds which may have been advanced to, or
on behalf of, the Borrower by the custodian institution.
This letter is submitted to you in duplicate. Please execute
the duplicate copy of the certificate below, acknowledging the
existence of such account, so that we may present the copy signed by
you to HUD.
Name of Borrower
By (Signature)
Title
The undersigned institution certifies to the United States
Department of Housing and Urban Development (HUD) that the account
identified is in existence in this institution under account number
and agrees with the Borrower named above and HUD
to honor demands release on such account in the manner provided in
the above letter, subject only to any notice reauirements contained
in applicable regulations governing this institution, but in no event
to exceed seven business days . The undersigned institution further
agrees upon the request of HUD to refuse to honor any request for
release of the obligations and assignments from such account by
parties other than HUD and to change the name of the aforesaid
account to "United States Department of Housing and Urban
Development. " In no instance shall the obligations in the account be
used to offset funds which may have been advanced to, or on behalf
of, the Borrower by the custodian institution. Deposits in this
institution are insured by the Federal Deposit Insurance Corporation,
the Federal Savings and Loan Insurance Corporation, or the National
Credit Union Administration.
N e of Institution By
Title Date
ATTACHMENT I
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
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 . )
This account is established for repayment of the note guaranteed
by HUD under the Section 108 Loan Guarantee Program. (Loan
Repayment Account) .
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 u-
pon or withdrawals from such account by
parties other than HUD and to change the name of the aforesaid
ccount to the "United States Department of Housing and Urban
Development. " In no instance shall the funds in the Custodial
Account be used to offset funds which may have been advanced to, or
on behalf of, the Borrower by the custodian institutioh.
This letter is submitted to you in duplicate. Please execute
the duplicate copy of the certificate below, acknowledging the
existence of such account, so that we may present the copy signed by
you to HUD.
Name of Borrower
By (Signature)
Title
The undersigned institution certifies to the United States
Department of Housing and Urban Development (HUD) that the account
identified is in existence in this institution under account number
and agrees with the Borrower named above and HUD
to honor demands on such account in the manner provided in the above
letter, subject only to notice requirements contained -in applicable
regulations governing this institution, but in no event to exceed
seven business days . The undersigned institution further agrees upon
the request of HUD to refuse to honor any instruments drawn upon or
withdrawals from such account by parties other than HUD and to change
the name of the aforesaid account to "United States Department of
Housing and Urban Development. " In no instance shall the funds in
the Custodial Account be used to offset funds which may have been
advanced to, or on behalf of, the Borrower by the custodian
institution. Deposits in this institution are insured by the Federal
Deposit Insurance Corporation, the Federal Savings and Loan Insurance
Corporation, or the National Credit Union Administration.
N e of Institution By
Title Date
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 . )
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
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 D. 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 Lsiness days .
You are further authorized upon the request of HUD to refuse to
honor any request for release of the obligations and assignments from
such account by parties other than HUD and to change the name of the
aforesaid account to the "United States Department of Housing and
Urban Development. " In no instance shall the obligations in the
account be used to offset funds which may have been advanced to, or
on behalf of, the Borrower by the custodian institution.
This letter is submitted to you in duplicate. Please execute
the duplicate copy of the certificate below, acknowledging the
existence of such account, so that we may present the copy signed by
you to HUD.
Name of Borrower
By (Signature)
Title
The undersigned institution certifies to the United States
Department of Housing and Urban Development (HUD) that the account
identified is in existence in this institution under account number
, and agrees with the Borrower named above and HUD
to honor demands release on such account in the manner provided in
the above letter, subject only to any notice requirements contained
in applicable regulations governing this institution, but in no event
to exceed seven business days . The undersigned institution further
agrees upon the request of HUD to refuse to honor any request for
release of the obligations and assignments from such account by
parties other than HUD and to change the name of the aforesaid
account to "United States Department of Housing and Urban
Development. " In no instance shall the obligations in the account be
used to offset funds which may have been advanced to, or on behalf
of, the Borrower by the custodian institution. Deposits in this
institution are insured by the Federal Deposit Insurance Corporation,
the Federal Savings and Loan Insurance Corporation, or the National
Credit Union Administration.
Na-me of Institution By
Title Date
City of fF'ort Worth, Texas
3JWcyorand Council Conit"unie' ation
:DATE REFERENCE NUMBER LOG NAME PAG
6/2/98 C-16807 42MERCADO 1 of 2
SUBJECT AWARD OF LOAN ORIGINATION AND LOAN SERVICING CONTRACT TO THE FORT
WORTH ECONOMIC DEVELOPMENT CORPORATION FOR THE MERCADO FORT
WORTH PROJECT
RECOMMENDATION:
It is recommended that the City Council:
1. Approve the transfer of $10,000 in Community Development Block Grant Year Sixteen (16) Funds
to the Mercado Fort Worth Project; and
2. Authorize the City Manager to execute an agreement with the Fort Worth Economic Development
Corporation for a fee not to exceed $10,000 for loan origination and loan servicing activities for the
Mercado Fort Worth project.
DISCUSSION:
On March 11, 1998, the U.S. Department of Housing and Urban Development (HUD) announced that
the City has been approved for $5 million in Section 108 Loan Guarantees. The low-interest loan funds
will be made available to eligible businesses in north Fort Worth which are a part of, or compliment, the
Mercado Fort Worth project, located in the 1400 block of North Main Street.
It is proposed that the Fort Worth Economic Development Corporation (FWEDC) process and review
loan applications on behalf of the City based on underwriting criteria to be determined by the City. A
processing fee of $500.00 will be charged for each application (112 to be paid by the City) to offset
incidental costs, such as staff time, obtaining credit reports and title information. Prior to application,
potential borrowers will have access to free or low-cost loan packaging assistance through the Fort
Worth Business Assistance Center (BAC), and its affiliated agencies.
The $10,000 appropriated by the City will be used to pay $250 per application processing fee for forty
(40) clients. Successful loan applicants will be charged a 0.5% loan servicing fee, which will be
assessed monthly for the life of the loans. Additional one-time fees due at loan closing are: I
Loan processing fee (1.5% of total loan amount)
I
Appraisal fee ($1,000 to $1,500)
Construction management fee ($500 or 1% of construction budget)
Title and legal fees
i
At the borrower`s option, these fees can be rolled into the loan balance and paid over time.
i
1
7
i
City of Fort Worth, Texas
"raver 01"d (zou"Cit 4:0mmunicatio"
DATE 6/2/98 REFERENCE NUMB E-R C-1 807 1 LOG N PAGE
AME 02MERC ADO
6 2 of 2
SUBJECT AWARD OF LOAN ORIGINATION AND LOAN SERVICING CONTRACT TO THE FORT
WORTH ECONOMIC DEVELOPMENT CORPORATION FOR THE MERCADO FORT
WORTH PROJECT
FISCAL IN EORMATI ONICERII El CATION:
The Director of the Department of Finance certifies that funds are available in the current operating
budget, as appropriated, of the Grant Fund.
MG-j
Submitted for City Manager's FUND ACCOUNTI CENTER AMOUNT CITY SECRETARY
Of fore by: 10)
GR76 1 5 9 20 01320608894 $10-000M W14ROVED I
Rarn6n Gua�ardo
6191
1
Clriint Department Head: CITY CO i
Joe Paniagua 6168 (from)
7 12 j '52060889911 1 $10,000,00
(2)GR76 539- 120 1 01,12,06.
ry, F tha
T'Ih,Tr
r�,ichard Tucke, SUN
L