Loading...
HomeMy WebLinkAboutR-1994-068 Contingent Loan Agreement• • • RESOLUTION NO. R-94 68 A RESOLUTION authonzmg and directing the City Manager of the City of Yakima to execute a Contmgent Loan Agreement with the Yakima Housing Authority for implementation of the Yakima Housmg Authority Housing Program. WHEREAS, the City of Yakima currently administers funds for redevelopment of substandard housing including detrimental land parcels, and WHEREAS, the lending institution and developer will participate m that program upon execution by the City m Partnership for housing development with the Yakima Housmg Authonty and City Council deems it to be in the best mterests of the City that the agreement be executed by the City, now therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: The City Manager is hereby authorized and directed to execute a Contingent Loan Agreement in substantially the form attached hereto, subject to final approval of the terms and conditions by the City Attorney. ADOPTED BY THE CITY COUNCIL this 7th day of June ATTEST City Clerk ' Mayor 1994. 05.26/9.1 15:14 FAX 20641779700 3 FP & S SEATTLE Draft of 5/26/94 CONTINGENT LOAN AGREEMENT 4 003; 015 _ THIS CONTINGENT LOAN AGREEMENT (this "Agreement") by and between the kCITY OF YAKIMA, WASHINGTON (the "City"), and the HOUSING AUTHORITY OF THE CITY OF YAKIMA, a public body corporate and politic of the State of Washington (the "Authority"); WITNESSETH: WHEREAS, Revised Code of Washington ("RCW") Section 35.83.050 provides that a county may lend or donate money to a housing authority or agree to take such action; and WHEREAS, the Authority, by its Resolution No. , adopted , 1994, authorized the issuance of the Auth- ar ty's Low - Income Housing Assistance Revenue Bonds, 1994 [,Series A and B] (Nueva Primavera Project) (the "Bonds") in the amount of not to exceed $2,500,000, for the purpose of providing the funds with which to finance the acquisition of a 64 -unit apartment complex known as the Nueva Primavera Apartments (the "Project") to provide a housing project of the Authority; and WHEREAS, the City, by [Ordinance/Resolution] No. (passed/adopted] , 1994, declared its intent to enter into a contingent loan agreement with the Authority to evidence the City's commitment to make loans to the Authority if and to the extent necessary to replenish the Reserve Account maintained by the trustee for the Bonds and to make up any deficiencies in the amounts provided by the Authority to make payments of the principal, of and interest on the Bonds when due, and approved the form and execution of this Agreement; NOW, THEREFORE, in consideration of the mutual covenants hereinafter contained, the parties hereto covenant and agree as follows. ARTICLE I Incorporation of Documents; Definitions Section 1.01. Incorporation of Documents. Copies of the Trust Indenture (including any amendments or supplements thereto, the "Indenture") between the Authority and , as Trustee, relating to the Bonds and the Deed of Trust (as defined in the Indenture) are attached hereto as Exhibits A and B, respectively. The Authority shall not amend the Indenture or the Deed of Trust without the prior written consent of the City so long as this Agreement is in effect. 0133430.01 UO; _1; ,V.{ 10:.4 rA.1. cuo44 i r r uu a rr N a at_A111.L. .t,VV-e VLA Section 1.02. Definitions. Unless the context clearly requires otherwise, the following terns shall have the respective meanings set forth below for ,all purposes of this Agreement. [ Mdditiona1 Bonds means any bonds issued pursuant to Section 2.7 of the Indenture.] CaveraaL Ratio means the ratio of Net Operating Income to Required Net Debt Service. [ Eligible Maintenance Expenses beans the cost of those unforeseen repairs and improvements, and other expenses, that are necessary, in the opinion of the Executive Director of the Authority, for the viability of the Project.] [ Excess Revenues means, for each Fiscal Year beginning on or after , 199_, the excess, if any, of Revenues for that period over the sum for that period of (1) Operation and Maintenance Costs, (2) Required Debt Service, (3) Trustee's fees and Rating Agency fees, if any, (4) the amount, if any, required to restore the balance in the Reserve Account to the Reserve Requirement, [(5) the cost of Eligible Maintenance Expenses,] and [(5)/(5) the Administrative Allowance.] General Revenues ;means all revenues (other than Revenues) of the Authority from any source, but only to the extent that those revenues are available to pay debt service on the Bonds and are not pledged, by law, regulation, contract, covenant, deed of trust or otherwise, to another particular purpose. Investment Earnings means all earnings derived from the investment of money held in any of the Funds held by the Trustee under the Indenture. Net Operating Income means Revenues other than Investment Earnings, less Operation and Maintenance Costs. Operation and Maintenance Costs means all necessary costs to the Authority of operating and maintaining the Project, including but not limited to administrative and general expenses, costs of insurance (including reasonable contributions for self-insurance reserves, if any), consulting technical services and repairs and replacements (to the extent not properly classifiable as capital costs) and reasonable reserves therefor, but excluding depreciation (or reserves therefor), amortization of intangibles or other bookkeeping entries of a similar nature and debt service on the Bonds. operation and Maintenance Costs shall not include the [Administrative Allowance][, Eligible Maintenance Expenses] car costs paid from reserves or from money disbursed from the Project Fund. Reguired Debt Service means the amount required to pay principal of and interest on the Bonds when due, including amounts required for the mandatory redemption of Bonds pursuant to the 0133430.01 -2- 05;26:94 15:45 FAX 2064479700 3 FP & S SEATTLE k6 005;015 Indenture but not including amounts in connection with the optional redemption [or special redemption of Bonds from Excess Revenues pursuant to the Indenture]. Required Net Debt Service means, for any period, Required Debt Service for that period plus the amount of Trustee fees payable during that period less known investment income on amounts in the Reserve Account [and the Property Reserve Account] for that period and amounts in the Principal and Interest Account available during that period to pay Required Debt Service on the Bonds. Reserve Account means the account of that name in the Bond Fund. Reserve Requirement means, with respect to the Bonds, an amount equal to the maximum annual debt service on the Bonds, including amounts required for the mandatory redemption of Bonds pursuant to the Indenture, initially $ [, and with respect to any Additional Bonds, the amount described in Section 2.7 of the Indenture). Revenues means all amounts due to or received by the Authority or by the Trustee for the account of the Authority pursuant or with respect to the Project, including without limitation all lease payments, Insurance Proceeds, Condemnation Awards, and proceeds resulting from foreclosure of the Deed of Trust, and all Investment Earnings. Trustee means association organized and existing States of America and having its p , or its su Indenture. All other capitalized Agreement shall have the Indenture. , a national banking under the laws of the United incipal place of business in cessor, as trustee under the terms sed but not defined in this meanin•s assigned to them in the ARTICLE 1 I Loans to the A thoritv; L'nita ion of L'abil't Repayment Terms: Interest 1 2a Section 2.01. Loans to the A lend to the Authority the principal (1) the amount sufficient, together the Project deposited with the Trus Account maintained by the Trustee t thorit . The City agrees to mount equal to the greater of ith Net Operating Income from ee, to replenish the Reserve the Reserve Requirement for the Bonds [and any Additional Bonds], and (2) the amount sufficient, together with Net Operating Income from the Project and other money, including money in the Reserve Account, on deposit with the Trustee, to pay the principal of and interest on the Bonds 013430.01 -3- )5 26.94 15:46 FAX 20634 i 97UU 3 it & 5 S .Af1Lh seuu$Ju15 [and any Additional Bonds] when due. The Authority agrees to borrow the amounts described above from the City pursuant to this Agreement for the purpose of meeting its obligations under. the Bonds[, any Additional Bonds] and the Indenture. The total amount of funds to be lent by the City pursuant to this Agreement shall not exceed the principal amount of the Bonds [and any Additional Bonds] plus interest due and unpaid by the Authority. Section 2.02. Time of L. The loan shall be made at such time, if any, as the Authority is unable, because of lack of Net operating Income from the rental of the Project, to replenish the Reserve Account to the Reserve Requirement for the Bonds [and any Additional Bonds] or if the money available under the Indenture to the Trustee is insufficient to pay the principal of and interest on the Bonds [arid any Additional Bonds) when due. The loan may be rade in a series of principal advances. Section 2.03. Repa mem Cans . The loan shall be repaid on terms established at such time as funds are advanced. Such terms shall require the repayment of principal of such. advance and interest thereon from the General Revenues of the Authority and from the first available Revenues from the Project after payment: of Operation and Maintenance Costs, debt service on the Bonds [and any Additional Bonds)[, Eligible. Maintenance Costs] , credit enhanceine:nt payments due to the City hereunder and the fees of the Trustee (end the Rating Agency, if any,) and after replenishing the Reserve Account. Section 2.04. Interest pate. The rate of interest borne by each advance hereunder shall be the rate that represents the documented actual cost (including opportunity cost) to the City of making the loan to the Authority, but in no event shall the rate of interest on any loan hereunder exceed 12% per annum. The City may i-1 its discretion charge a lower rate of interest. Section 2.05. Procedure;. The Authority, or the Trustee on behalf of the Authority, shall, within two Business Days of any withdrawals from the Reserve Account, give written notice to the City of such withdrawal, which notice shall state the amount, if any, required to restore the Reserve Account to the Reserve Requirement for the Bonds [and any Additional Bonds]. By the following the City shall deliver to the: Trustee :dor deposit into the Reserve Account the greater of one-half of the amount(s) specified or the amount, together with other funds held by the Trustee under the Indentture for the purpose, required to pay debt service on the Bonds [and any Additional Bonds] on the following , and shall deliver to the Trustee no later than of that year the greater of the balance of the amount (s) so specified or the amount, together with other funds held by the Trustee under the Indenture for the purpose, required to pay debt service on the Bonds [and any Additional Bonds] on the following The Authority also shall provide, with or 013 0.01 -4- U3• L0, 28i 10.47 ry1 LVV•t1I vv ,? a 4 V% .i .J a.. ... i..... prior to the submission to the City of the certificate requesting funds, an accounting of its operation of the Project, including cash flow projections and a loan repayment plan. In the event of a deficiency in the mount available to the Trustee to pay principal of and interest on the Bonds when due as a result of acceleration of the Bonds or the mandatory redemption of Bonds on , because of the failure of the Authority to acquire the Project by , then immediately upon receipt of notice from the Trustee of such event (which notice is required by the Indenture to be given by ), the City shall deposit with the Trustee, on behalf of the`- Authority, the amount required to make up such deficiency. Section 2.06. Mature of Authority'* Obligation. The obligation of the Authority to make the loan payments from the sources identified herein and to perform and observe the other obligations on its part contained herein shall be absolute and unconditional, and shall not be subject to diminution by setoff, counterclaim, abatement or otherwise. Section 2.07. Nature of City's obligation. The obligation of the City to advance funds to the Trustee on behalf of the Authority in the amounts, at the times and in the manner described herein shall be absolute and unconditional, and shall not be subject to diminution by, setoff, counterclaim, abatement or otherwise. The full faith, credit and resources of the City are pledged irrevocably for the payment to the Trustee, on behalf of the Authority, of the amounts described herein. The City agrees that it will include in its budget for each fiscal year following the receipt_ by the City of notice under Section 2.05 that a deposit to the Reserve Aocount is required an amount equal to the deficiency in the Reserve Account to be rade up by the City pursuant to this Agreement. The obligations of the City hereunder shall terminate upon payment in full of the principal of and interest on a:1 Outstanding Bonds [and Additional Bonds]. ARTICLE III Authorit Covenants and ..reer.er.tl Section 3.01. Debt Service Coverage Ratio. The Authority has covenanted in the Indenture to maintain a Coverage Ratio of at least to 1, on all Bonds [and Additional Bonds] outstanding. Section 3.02. Reports and Records. The Authority agrees to provide to the City upon request, within 30 days of the Authority's receipt or preparation of such documents, copies of the following: (1) the Authority's audited and unaudited financial statements; 0133430.01 -5- 05.26;94 15:48 1:1 VJti43787OU 3 rr & JtA111-. (2) allreports received by the Authority fro the Trustee under Section 8.10 of the Indenture; and (3) all certificates required to be given to the Trustee by the. Authority under Sections 6.2 and 6.3 of the Indenture. In addition, the Authority agrees that the City may have access to and inspect, examine and make copies of the books and records and any and all accounts and data of the Authc:_ ity relating to the Project, including reports to the Authority from the manager of the Project. Section 3.03. Payments to City. The Authority shall reimburse the City for all out-of-pocket costs, including attorneys' fees, incurred by the City in negotiating and entering into this Agreement. ARTICLE IV Remedies Upon Default Section 4.01. Rights pf Cit ton farina Loans,. If the City has trade any loans to the Authority hereunder and such loans have not been repaid in full (whether or not the lcan is in default), the City may take any one or more of the following steps.: (a) The City may request that the Trustee accelerate the maturity of the Bonds (and any Additional Bends] in accordance w..th Section 7.2 of the Indenture; (b) If the Authority is in default in its repayment obligations with respect to any loans made to the Authority by the City hereunder (an "Authority Default") and if, and only if, the Bonds (and any Additional Bonds] are no longer outstanding, the City may declare the entire principal balance of the loan (if not then due and payable) to be due and payable immediately, and upon any such declaration the principal cf the loan shall become and be immediately due and payable, togethe=r with all into; es t accred thereon to the date of such acceleration, anything in this Agreement to the contrary notwithstanding. The City may waive srLh Authority Default and may rescind and annul such declaration and its consequences; but no such waiver, rescission or annulment shall extend to or affect any subsequent Aethority Default cr impair any right incident thereto; (c) The city may, but shall net be required to, appoint a manager (which may be the city) for the 'Project; and (d) The City may proceed to protect and enforce its rights to equity or at law, either in mandamus or for the specific performance of any covenant or agreement cc:ntaired hezein, or fez: the enforcement of any other appropriate legal or eq-uit.3ble remedy, Ci3343OO1 -6- 05/26;94 15:48 FAI 2084472700 3 FP & S SiA11LE LEIVVV,ULU as the City may deem most effectual to protect and enforce any of its rights or interests hereunder. Section 4.02. Remedies of Authority an Default. Upon the occurrence of a default by the City in its obligations to make loans to the Authority hereunder (a "City Default") the Authority may proceed to protect and enforce its rights in equity or at law, either in mandamus or for the specificerformance of any covenant or agreement contained herein, or for the enforcement of any other appropriate legal or equitable remedy, as the Authority may deem Most effectual to protect and enforce any of its rights or interests hereunder. Section 4.03. No Remedy Exclusive. No remedy conferred upon or reserved to either party by this Agreement is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute, and either party hereto shall be free to pursue, at the same time, each and every remedy, at law or in equity, which it may have under this Agreement, or otherwise. section 4.04. No Implied Waiver. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power =ay be exercised from time to time and as often as may be deemed expedient. For the exercise of any remedy, it shall not be necessary to give any notice, other than such notice as may be expressly required herein. Section 4.05. Agreement to Pay Attorneys' Fees and. Expenses. If a default arises under any of the provisions of this Agreement and either party hereto should employ attorneys or incur other expenses for the collection of amounts due under this Agreement or the enforcement of perfornance or observance of any obligation or agreement on the part of the other party contained in this Agreement, on demand therefor, the nonprevailing party shall pay or reimburse the prevailing party for the reasonable fees of such attorneys and such other expenses so incurred. ARTICLE V Miscellaneous Section 5.01. Governinc Law; Venue. This Agreement is governed by and shall be construed in accordance with the substantive laws of the State of Washington and shall be liberally construed so as to carry out the purposes hereof. Except as otherwise required by applicable law, any action under this Agreement shall be brought in the Superior Court of the State of Washington in and for Yakima County and/or in the United States District Court for the western District of Washington. 0133430.01 -7- 05;2844 15:441 FAX 2064179700 3 FP & S SEATTLE 11010;015 Section 5.02. Notices. Except as otherwise provided herein, all notices, consents or other communications required hereunder shall be in 'writing and shall be sufficiently given if addressed and mailed by first --class, certified or registered mail, postage prepaid and return receipt requested, as follows: To the City: City of Yakima 129 N. 2nd Street Yakima, Washington 98901 Attention: To the Authority: Housing Authority of the City of Yakima 110 Fair Avenue Yakima, Washington 98901 Attention: Executive Director The City or the Authoriey ray, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates, requests or other communications shall be sent. Notices shall be deemed served upon deposit of such notices in the United States mail iri the -manner provided above. Section 5.03. Binding Ufec,. This Agreement shall inure to the benefit of and shall be bieeing upon the City and the Authority and their successors. This Agree...-pnt =ay not be assigned, except that the Authority shall have the right to assign to the Trustee its right to obtain funds fror. the City hereunder for the benefit of the owners of the Bonds. Section 5.04. Severability. In the event any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. section 5.05. pnendnents; '_'erninationf . Additional Bondle_j. This agreement may not be effeeeivs y amended, cha„ ged, modified or altered, except by an instrument in writing duly executed by the City and the Authority (or their successors in title) . If the Bonds [or Additional Bonds] are rated by a rating agency, then no such amendment shall be permitted unless the Authority, or the Trustee on behalf of the Authority, has received written conf ii•Ination from the rating a: ency that such amendment ent will not result in a reduction or withdrawal of the rating on the Bonds [or Additional Bonds]. If the Bonds [and anv Additional Bonds] are not rated by a rating agency, then no such a end.nent will be permitted unless in the opinion of the. Teustee such amendment will not adversely affect the owners of the Bonds [or Additional Bonds] . 013300.01 05.26-'94 15:49 FAX 2CzU77970U 3 FP & S SEATTLE W V1i' V1.l This Agreement may not be terminated until the Bonds [and any Additional Bonds] have been paid in full or defeased, unless the City has assumed all liability for payment of the principal of and interest on the Bonds [and any Additional Bonds] when due and shall have pledged its full faith and credit to such payment. [ The Authority shall not issue any Additional Bonds without the prior written consent of the City.) Section 5.:5. Waiver of Breach. No waiver of any breach of any covenant or agreement contained herein shall operate as a waiver of any s:=bsequent breach of the same covenant or agreement or as a waiver :f any breach of any other covenant or agreement, and in case of a breach by either party of any covenant, agreement or undertaking, the nondefaulting party may nevertheless accept from the other any payment or payments or performance hereunder without in anyway waiving its right to exercise any of its rights and remedies pr:sided for herein or otherwise with respect to any such default or defaults that were in existence at the time such payment or payments or performance were accepted by it. Section 5.C7. No Rights Created in Third Parties. of this Agreeme-•o are not intended to establish nor to rights in any persons or entities other than the Authority and the respective successors and assigns of Section 5.2. Time of Essence. Time and all conditions shall be of the essence of this Agreement. The terms create any City, the each. terms and Section 5.C. Ter inat ign of Agreement. This Agreement shall terminate upon payment in full of all principal of and interest on the Bonds [nd any Additional Bonds](or defeasance thereof pursuant to Article IX of the Indenture). ORAL AGREE" NTS OR ORAL COMMITMENTS TO LEND MONEY, EXTEND C',EDIT, OR FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW. IN WITNESS VHEREOF, the city and the Authority have caused this Agreement t: be executed in their respective names by their duly authorized officers, and have caused this Agreement to be dated as of , 1994. 01550P.M CITY OF YAKIMA, WASHINGTON By HOUSING AUTHORITY OF THE CITY OF YAKIMA, WASHINGTON -9- 05:26,04 15:50 F_ 12064470700 3 FP & S SEATTLE By Attest: Executive Director 0133430.01 4012 •C15 Chair, Board of Commissioners;