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HomeMy WebLinkAbout2015 CON HUD - Fire Station Loan RefinanceNOTE TO FILE 02-02-16 IN THE MATTER OF: Resolution of the City Council of the City of National City authorizing the City to participate in a U.S. Department of Housing and Urban Development public offering as part of the Section 108 Loan Guarantee Assistance Program to refinance the existing note in the original principal amount of $6,900,000 used to fund the construction of Fire Station 34. Please note the following: NO FULLY EXECUTED ORIGINAL CONTRACT WAS FILED WITH THE OFFICE OF THE CITY CLERK ORIGINATING DEPARTMENT: NTF CDC X Housing & Grants City Attorney _ Human Resources City Manager _ MIS _ Community Svcs. _ Planning Engineering _ Police Finance Public Works Fire Contract for Fixed Rate Note, Entitlement, 04-06-15 *Defeaeing* U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT CONTRACT FOR LOAN GUARANTEE ASSISTANCE UNDER SECTION 108 OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1974, AS AMENDED, 42 U.S.C. §5308 For Series HUD 2015-A Certificates This Contract for Loan Guarantee Assistance ("Contract") is entered into by the City of National City, California, as Borrower (the "Borrower"), and the Secretary of Housing and Urban Development ("Secretary"), as guarantor for the Guarantee made pursuant to section 108 ("Section 108") of title I of the Housing and Community Development Act of 1974, as amended (the "Act") and 24 CFR Part 570, Subpart M, of the promissory note executed contemporaneously herewith and numbered B-00-MC-06-0560, in the Aggregate Principal Amount of $4,140,000, and any amended note or note issued in substitution for such note and having the same note number (the "Note"). This is one of multiple Contracts under the Funding Approval ("Commitment") of the same number, which was approved by the Secretary on M A y 1 / 2_c>c, . Such Aggregate Principal Amount will be paid or credited to the account of the Borrower pursuant hereto, and all such amounts are collectively referred to herein as the "Guaranteed Loan Funds." The Note (including the Fiscal Agency Agreement and the Trust Agreement as defined in the Note and incorporated therein) is 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 Note. The Fiscal Agency Agreement and the Trust Agreement are sometimes collectively referred to herein as the "Fiscal Agency/Trust Agreements," and the Fiscal Agent and the Trustee are sometimes collectively referred to as the "Fiscal Agent/Trustee." PART I A. The Note. The Note is payable to the Trustee as Registered Holder. On the Public Offering Date, it is expected that trust certificates backed by the Note and similar notes issued by other Section 108 borrowers, denominated "Section 108 Government Guaranteed Participation Certificates Series HUD 2015-A," will be purchased for a purchase price of the full Aggregate Principal Amounts thereof by underwriters selected by the Secretary (the "Underwriters") pursuant to an Underwriting Agreement between the Underwriters and the Secretary, at a closing on such Public Offering Date as determined by the Secretary and the Underwriters. The Borrower agrees that the interest rate at which the trust certificate of a specified maturity is sold to the Underwriters shall be the interest rate inserted on the Public Offering Date in Schedule P&I of the Note for the Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeaaing* Principal Amount of corresponding maturity. The Note shall be effective as an obligation of the Borrower only upon its delivery by the Secretary to the Fiscal Agent/Trustee and sale to the Underwriters at the closing on the Public Offering Date. The Borrower authorizes the Secretary to deliver the Note, together with the Secretary's Guarantee thereof, to the Fiscal Agent/Trustee as of such closing on the Public Offering Date, in accordance with the Fiscal Agency/Trust Agreements. After the Public Offering Date, the Borrower agrees that the Trustee pursuant to the Trust Agreement will maintain the books and records of all payments on the Note and all Principal Amounts and interest rates on such Principal Amounts. B. Consents. By execution of this Contract the Borrower ratifies and consents to the Secretary's selection of the Underwriters and authorizes the Secretary to negotiate with the Underwriters the terms of the Underwriting Agreement and of the public offering of interests in the trust certificates to investors (including the applicable interest rates). In addition, by execution hereof the Borrower ratifies and consents to the Secretary's selection of the Fiscal Agent/Trustee and agrees to the respective terms of the Fiscal Agency/Trust Agreements. C. Prior Contracts. As of the date of the Secretary's Guarantee of the Note, this Contract supersedes any prior Contract for Loan Guarantee Assistance entered into between the parties with respect to the Guaranteed Loan Funds, the terms of the Secretary's Guarantee, and any other matter covered by this Contract, provided that any such prior contract continues to govern any action taken by the Borrower or the Secretary pursuant thereto and prior to the Secretary's Guarantee of the Note (except for the provisions of paragraph 4 of this Contract) , and further provided that this Contract does not supersede such prior contract with respect to any note having the same note number other than the promissory note identified in paragraph 15(a). Notwithstanding the preceding sentence, if such prior contract contained provisions for security or other Borrower -specific terms for the benefit of the Secretary or to ensure program compliance in addition to the security identified in paragraphs 5(a), 5(b), 5(d), or 5(e) hereof, which security or other Borrower -specific terms may be generally set forth or incorporated in paragraph 5(c) (and any related provisions incorporated in paragraph 12) of such prior contract, or may be set forth in paragraph 15 or any succeeding paragraphs (including related provisions incorporated in paragraph 12) of such prior contract or any Attachment thereto, such additional security provisions or other Borrower -specific terms of the prior contract are hereby incorporated in this Contract and shall be deemed a part hereof. 2 Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeaeing* PART II 3 1. Receipt, Deposit and Use of Guaranteed Loan Funds. (a) Except for fees and charges deducted on the Public Offering Date pursuant to paragraph 4(a) by the Fiscal Agent/Trustee, or funds used to pay off any interim note refinanced by the Note, the Guaranteed Loan Funds shall be electronically transferred in accordance with the Borrower's instructions for deposit in a separate, identifiable custodial account (the "Guaranteed Loan Funds Account") with a financial institution whose deposits or accounts are Federally insured. The Guaranteed Loan Funds Account shall be established and designated as prescribed in the attached form document entitled "Letter Agreement for Section 108 Loan Guarantee Program Custodial Account" (Attachment 1) and shall be continuously 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 shall make withdrawals from said account only for payment of the costs of Section 108 activities approved by HUD, for transfer to the Loan Repayment Account or for the temporary investment of funds pursuant to this paragraph 1(a). Such temporary investment of funds into the Guaranteed Loan Funds Investment Account shall be required within three Business Days after the balance of deposited funds exceeds the amount of the Federal deposit insurance on the Guaranteed Loan Funds Account. At that time, any balance of funds in the Guaranteed Loan Funds Account exceeding such insurance coverage shall be fully (100%) and continuously invested in Government Obligations, as defined in paragraph 10 hereof, held in the Guaranteed Loan Funds Investment Account. All temporary investments, whether or not required as above, shall be limited to Government Obligations having maturities that are consistent with the cash requirements of the approved activities. In no event shall the investments mature on or after N/A , or have maturities which exceed one year. All such investments shall be held in trust for the benefit of the Secretary by the above financial institution 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), which account shall be maintained for all 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 is required to invest, or otherwise invests, the Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* 4 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 or the Guaranteed Loan Funds Investment Account must be withdrawn and disbursed by the Borrower for approved activities by N/A . Any funds remaining in either Account after this date shall be immediately transferred to the Loan Repayment Account established pursuant to paragraph 6 of this Contract. (b) The 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, until such Accounts are fully disbursed. (c) Upon the Secretary giving notice that the Borrower is in Default under this Contract or the Note, all right, title, and interest of the Borrower in and to the Guaranteed Loan Funds and Guaranteed Loan Funds Investment Accounts shall immediately vest in the Secretary for use in making payment on the Note, purchase of Government Obligations in accordance with paragraph 10, or payment of any other obligations of the Borrower under this Contract or the Fiscal Agency/Trust Agreements, in each case as elected by the Secretary in his sole discretion. 2. Payments Due on Note. The Borrower shall pay to the Fiscal Agent/Trustee, as collection agent for the Note, all amounts due pursuant to the terms of the Note. In accordance with the Note and the Fiscal Agency/Trust Agreements, payment shall be made by 3:00 P.M. (New York City time) on the seventh Business Day (the "Note Payment Date") preceding the relevant Interest Due Date or Principal Due Date (each as defined in the Note). If any Note Payment Date falls on a day that is not a Business Day, then the required payment shall be made on the next Business Day. Payment may be made by check or wire transfer. Upon final payment of all amounts due to Holders under the Note, including any payment made by the Secretary pursuant to the Guarantee, the Fiscal Agent/Trustee is required by the Fiscal Agency/Trust Agreements to return the Note to the Secretary. Upon final payment to the Secretary of any amounts due as a result of Guarantee Payments or otherwise due under Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* this Contract, the Secretary will cancel and return the Note to the Borrower in discharge of the Borrower's obligations under the Note. 3. Selection of New Fiscal Agent or Trustee. The Secretary shall select a new Fiscal Agent or Trustee if the Fiscal Agent or Trustee resigns or is removed by the Secretary. The Borrower hereby consents in advance to any such selection and to any changes in the Fiscal Agency/Trust Agreements agreed to by any Fiscal Agent or Trustee and the Secretary, subject to paragraph 4(d) of this Contract. 5 4. Payments Due Fiscal Agent or Trustee; Documents to the Secretary. (a) The Borrower agrees to pay the Borrower's share, as determined by the Secretary, of the customary and usual issuance, underwriting, and other costs related to the public offering and future administration of the Note and the trust certificates, as approved by the Secretary, including the cost of reimbursement and/or compensation of the Trustee pursuant to the Trust Agreement, including Sections 3.11 and 7.01 thereof. In connection with the public offering, such payment shall either be made by wire transfer to the Trustee on the day prior to the Public Offering Date or shall be deducted from the Guaranteed Loan Funds on the Public Offering Date. (b) The Borrower shall submit to the Secretary not later than twelve (12) Business Days prior to the Public Offering Date applicable to the Note, this executed Contract, the executed Note, and an opinion acceptable to the Secretary from the Borrower's counsel to the effect that: (i) the governing body of the Borrower has authorized by resolution or ordinance, in accordance with applicable State and local law, the issuance of the Note and the execution of this Contract; (ii) the Note and this Contract are valid, binding, and enforceable obligations of the Borrower; (iii) the pledge of funds pursuant to 24 CFR §570.705(b)(2) and paragraph 5(a) of this Contract is valid and binding; and (iv) there is no outstanding litigation that will affect the validity of the Note or this Contract. In addition, the Borrower shall submit any other additional documents or opinions specifically required by this Contract (e.g., paragraph 5(c), or paragraph 15, et seq.), at the time required thereby. (c) The Borrower agrees to reimburse the Underwriters upon demand by the Secretary for the Borrower's share, as determined by the Secretary, of all reasonable out-of-pocket expenses (including reasonable fees and disbursements of counsel) incurred in connection with a proposed public offering, if the Underwriters incur such additional costs for the public offering because the Borrower withdraws from the Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeaaing* offering within ten Business Days of the Public Offering Date, or if the Borrower fails for any reason timely to submit in acceptable form any document required by this Contract (including paragraph 4(b)) to be submitted before the Public Offering Date. By execution and delivery of this Contract to the Secretary, the Borrower hereby expressly authorizes the Secretary to pay amounts due under this paragraph from funds pledged under paragraph 5(a) of this Contract. (d) The undertakings in paragraphs 3 and 4 of this Contract are expressly subject to the requirement that the Fiscal Agency/Trust Agreements shall in no event require payment of fees or charges, reimbursement of expenses, or any indemnification by the Borrower from any source other than funds or other security pledged, as may be augmented by Borrower -specific terms for the benefit of the Secretary, pursuant to paragraphs C, 5, or 15, et seq., of this Contract. 5. Security. The Borrower hereby pledges as security for repayment of the Note, and such other charges as may be authorized in this Contract, the following: (a) All allocations or grants which have been made or for which the Borrower may become eligible under Section 106 of the Act, as well as any grants which are or may become available to the Borrower pursuant to Section 108(q). (b) Program income, as defined at 24 CFR 570.500(a)(or any successor regulation), directly generated from the use of the Guaranteed Loan Funds. (c) Other security as described in paragraph 15, et seq., or incorporated herein by paragraph C hereof, as applicable. (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. Loan Repayment Account. (a) All amounts pledged pursuant to paragraphs 5(b), 5(c), and 5(d) of this Contract shall be deposited immediately on receipt in a separate identifiable custodial account (the "Loan Repayment Account") with a financial institution whose deposits or accounts are Federally insured. The Loan Repayment Account shall be established and designated as prescribed in the attached form document entitled "Letter Agreement for Section 108 Loan Guarantee Program Custodial Account" (Attachment 1) and shall be maintained for such 6 Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* 7 pledged funds. The Loan Repayment Account need only be established if and when the Borrower receives amounts pledged pursuant to paragraph 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 shall make withdrawals from said account only for the purpose of paying interest and principal due on the Note (including the purchase of Government Obligations in accordance with paragraph 10 hereof), for payment of any other obligation of the Borrower under this Contract or the Fiscal Agency/Trust Agreements, or for the temporary investment of funds pursuant to this paragraph, until final payment and discharge of the indebtedness evidenced by the Note, unless otherwise expressly authorized by the Secretary in writing. Such temporary investment of funds shall be required within three Business Days after the balance of deposited funds exceeds the amount of the Federal deposit insurance on the Loan Repayment Account. At that time, any balance of funds in the Loan Repayment Account exceeding such insurance coverage shall be fully (1009) and continuously invested in Government Obligations, as defined in paragraph 10 hereof. All temporary investments, whether or not required as above, shall be limited to Government Obligations having maturities that are consistent with cash requirements for payment of principal and interest as required under the Note. In no event shall the maturities of such investments exceed one year. All such investments shall be held in trust for the benefit of the Secretary by the above financial institution in an account (the "Loan Repayment Investment 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), which account shall be maintained for all Government Obligations purchased with funds from the Loan Repayment Account. 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, for any month in which there are funds in such Accounts. Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeaeing* 8 (c) Upon the Secretary giving notice that the Borrower is in Default under this Contract or the Note, all right, title, and interest of the Borrower in and to the Loan Repayment and Loan Repayment Investment Accounts shall immediately vest in the Secretary for use in making payment on the Note, purchase of Government Obligations in accordance with paragraph 10, or payment of any other obligation of the Borrower under this Contract or the Fiscal Agency/Trust Agreements, in each case as elected by the Secretary in his sole discretion. 7 Use of CDBG, EDI or BEDI Funds for Repayment. Any funds available to the Borrower under Section 106 of the Act (including program income derived therefrom) are authorized to be used by the Borrower for payments due on the Note, Optional Redemption (as defined in the Note), payment of any other obligation of the Borrower under this Contract or the Fiscal Agency/Trust Agreements, or the purchase of Government Obligations in accordance with paragraph 10. Any funds specifically available to the Borrower for such payments or as a debt service reserve under an EDI Grant Agreement pursuant to Section 108(q) of the Act which supports the eligible project(s) and activities financed by the Note may also be used therefor; any other use of Section 108(q) funds for such purposes shall require the prior written approval of the Secretary. Unless otherwise specifically provided herein or unless otherwise expressly authorized by the Secretary in writing, the Borrower shall substantially disburse funds available in the Loan Repayment or the Loan Repayment Investment Accounts before funds from grants under Section 106 of the Act are withdrawn from the U.S. Treasury for such purposes. B. Secretary's Right to Restrict Use of CDBG Funds to Repayment Upon a determination by the Secretary that payments required by paragraph 2 and/or paragraph 4 of this Contract are unlikely to be made as specified, the Secretary may give the Borrower notice that the availability to the Borrower of funds pledged under paragraph 5(a) of this Contract for purposes other than satisfaction of the pledge is being restricted. This restriction shall be in an amount estimated by the Secretary to be sufficient to ensure that the payments referred to in paragraph 2 and/or paragraph 4 hereof are made when due. This restriction may be given effect by conditioning the restricted amounts to prohibit disbursement for purposes other than satisfaction of the pledge at the time such restricted funds are approved as grants, by limiting the Borrower's ability to draw down or expend the restricted funds for other purposes, and by disapproving payment requests submitted with respect to such grants for purposes other than satisfaction of the pledge. 9. Secretary's Right to Use Pledged Funds for Repayment. The Secretary may use funds pledged under paragraph 5(a) of this Contract or funds restricted under grants pursuant to paragraph 8 of this Contract to make any payment required of the Borrower Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* 9 under paragraph 2 and/or paragraph 4, if such payment has not been timely made by the Borrower. 10. Defeasance. For purposes of this Contract, the Note shall be deemed to have been paid (defeased) if there shall have been deposited with the Trustee either moneys or Government Obligations (defined below), which in the sole determination of the Secretary, mature and bear interest at times and in amounts sufficient, together with any other moneys on deposit with the Trustee for such purpose, to pay when due the principal and interest to become due on the Note. The Aggregate Principal Amount of the Note or any unpaid Principal Amount may be so defeased, in whole or in part, as of any Interest Due Date, or any other Business Day acceptable to both HUD and the Borrower. In accordance with the Note and the Trust Agreement, the Borrower shall give timely notice and written instructions to the Secretary and the Trustee concerning any principal amounts proposed to be defeased, including any Optional Redemptions proposed, which instructions shall be approved by the Secretary. If the unpaid Aggregate Principal Amount of the Note guaranteed pursuant to this Contract shall be defeased and deemed to have been paid in full, then the Borrower shall be released from all agreements, covenants, and further obligations under the Note. "Government Obligation" means a direct obligation of, or any obligation for which the full and timely payment of principal and interest is guaranteed by, the United States of America, including but not limited to, United States Treasury Certificates of Indebtedness, Notes and Bonds - State and Local Government Series or certificates of ownership of the principal of or interest on direct obligations of, or obligations unconditionally guaranteed by, the United States of America, which obligations are held in trust by a commercial bank which is a member of the Federal Reserve System and has capital and surplus (exclusive of undivided profits) in excess of $100,000,000. 11. Default. (a) A Default under the Note and this Contract shall occur upon failure by the Borrower to: (i) pay when due an installment of principal or interest on the Note; or (ii) punctually and properly perform, observe, and comply with any covenant, agreement, or condition contained in: (A) this Contract, (B) any security agreement, deed of trust, mortgage, assignment, guarantee, or other contract securing payment of indebtedness evidenced by the Note, or (C) any future amendments, modifications, restatements, renewals, or extensions of any such documents. Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* 10 (b) The Borrower waives notice of Default and opportunity for hearing with respect to a Default under paragraph 11(a). (c) In addition to Defaults under paragraph 11(a), the Secretary may declare the Note in Default if the Secretary makes a final decision in accordance with the provisions of section 111 of the Act and 24 CFR 570.913 (or any successor provisions), including requirements for reasonable notice and opportunity for hearing, that the Borrower has failed to comply substantially with title I of the Act. Notwithstanding any other provision, following the giving of such reasonable notice, the Secretary may, in the Secretary's sole discretion pending the Secretary's final decision, withhold the guarantee of any or all obligations not yet guaranteed on behalf of the Borrower under outstanding commitments, and/or direct the Borrower's financial institution to: refuse to honor any instruments drawn upon, or withdrawals from, the Guaranteed Loan Funds Account or the Loan Repayment Account initiated by the Borrower, and/or refuse to release obligations and assignments by the Borrower from the Guaranteed Loan Funds Investment Account or the Loan Repayment Investment Account. 12. Remedial Actions. Upon a Default or declaration of Default under this Contract, the Secretary may, in the Secretary's sole discretion, take any or all of the following remedial actions: (a) With any funds or security pledged under this Contract, the Secretary may (i) continue to make payments due on the Note, (ii) make an acceleration payment with respect to the principal amount of the Note subject to Optional Redemption as provided in Section B of the Note, (iii) purchase Government Obligations in accordance with paragraph 10 of this Contract, (iv) pay any interest due for late payment as provided in the Note, this Contract, or the Fiscal Agency/Trust Agreements, (v) pay any other obligation of the Borrower under this Contract or the Fiscal Agency/Trust Agreements, and/or (vi) pay any reasonable expenses incurred by the Secretary or the Fiscal Agent/Trustee as result of the Borrower's Default. (b) The Secretary may withhold the guarantee of any or all obligations not yet guaranteed or the disbursement of any or all grants not yet disbursed in full under outstanding guarantee commitments or grant approvals for the Borrower under Sections 108 and/or 106 of the Act. (c) The Secretary may direct the Borrower's financial institution to: refuse to honor any instruments drawn upon, or withdrawals from, the Guaranteed Loan Funds Account or the Loan Repayment Account by the Borrower, and/or refuse to release obligations and assignments by the Borrower from the Guaranteed Loan Funds Investment Account or the Loan Repayment Investment Account; and/or direct the Borrower and/or the Borrower's 0 Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* 11 financial institution to transfer remaining balances from the Guaranteed Loan Funds Account to the Loan Repayment Account. (d) With respect to amounts subject to Optional Redemption, the Secretary may accelerate the Note. (e) The Secretary may exercise any other appropriate remedies or sanctions available by law or regulation applicable to the assistance provided under this Contract, or may institute any other action available under law, to recover Guaranteed Loan Funds or to reimburse the Secretary for any payment under the Secretary's Guarantee or any reasonable expenses incurred by the Secretary as a result of the Default. (f) All notices and submissions provided for hereunder shall be in writing (including by telex, telecopier or any other form of facsimile communication) and mailed or sent or delivered, as to each party hereto, at its address set forth below or at such other address as shall be designated by such party in a written notice to the other party hereto. All such notices and other communications shall be effective when received as follows: (i) if sent by hand delivery, upon delivery; (ii) if sent by mail, upon the earlier of the date of receipt or five Business Days after deposit in the mail, postage prepaid; (iii) if sent by telex, upon receipt by the sender of an answer back; and (iv) if sent by telecopier, upon confirmed receipt. The Secretary: U.S. Dept. of Housing and Urban Development Attention: Paul Webster, Director Financial Management Division 451 7th Street SW, Room 7180 Washington, DC 20410 Borrower: City of National City Attn: Leslie Deese, City Manager City Manager's Office 1243 National City Blvd National City, CA 91950 13. Limited Liability. Notwithstanding any other provision of this Contract, the Fiscal Agency/Trust Agreements or the Note, any recovery against the Borrower for any liability for amounts due pursuant to the Note, the Fiscal Agency/Trust Agreements and this Contract shall be limited to the sources of security pledged in paragraphs C, 5, or any Special Conditions of or Modifications to this Contract, as applicable. Neither the general credit nor the taxing power of the Borrower, or of the State in which the Borrower is located, is pledged for any Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* payment due under the Note, the Contract, or the Fiscal Agency/Trust Agreements. 14. Incorporated Grant Agreement. The Contract and the Note are hereby incorporated in and made a part of the Grant Agreement authorized by the Secretary on JyNe 27, .xac:r under the Funding Approval for grant number B-00-MC-06-0560 to the Borrower. In carrying out activities with the Guaranteed Loan Funds hereunder, the Borrower agrees to comply with the Act and 24 CFR Part 570, as provided in Subpart M thereof. 15. Special Conditions and Modifications: (a) The Guaranteed Loan Funds shall be used only to pay principal amounts due or payable on or after August 1, 2015, under that certain promissory note issued by the Borrower and identified as Note Number B-00-MC-06-0560, Series 2003-A. The Guaranteed Loan Funds shall be deposited in a defeasance account established with the Trustee pursuant to the Contract for Loan Guarantee Assistance executed in connection with the issuance of such promissory note. The Borrower agrees to pay to the Trustee moneys in an amount equal to the amount of the interest to become due on such promissory note on August 1, 2015 for deposit in such defeasance account. Such payment shall be in addition to any payment required under paragraph 4(a) of this Contract and shall be made by wire transfer to the Trustee on the day prior to the Public Offering Date. In addition to the Secretary's rights under paragraph 9 of this Contract, the Secretary may use funds pledged under paragraph 5(a) of this Contract or funds restricted under grants pursuant to paragraph 8 of this Contract to make any payment required of the Borrower under this paragraph 15(a), if such payment has not been timely made by the Borrower. (b) Additional Grounds for Default. Notice of Default. Restriction of Pledged Grants. Availability of Other Remedial Actions. (i) The Borrower acknowledges and agrees that the Secretary's guarantee of the Note is made in reliance upon the availability of grants pledged pursuant to paragraph 5(a) (individually, a "Pledged Grant" and, collectively, the "Pledged Grants") in any Federal fiscal year subsequent to the Federal fiscal year ending September 30, 2014 to: (A) pay when due the payments to become due on the Note, or (B) defease (or, if permitted, prepay) the full amount outstanding on the Note. The Borrower further acknowledges and agrees that if the Secretary (in the Secretary's sole 12 0 0 Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* 13 discretion) determines that Pledged Grants are unlikely to be available for either of such purposes, such determination shall be a permissible basis for any of the actions specified in paragraphs (ii) and (iii) below (without notice or hearing, which the Borrower expressly waives). (ii) Upon written notice from the Secretary to the Borrower at the address specified in paragraph 12(f) above that the Secretary (in the Secretary's sole discretion) has determined that Pledged Grants are unlikely to be available for either of the purposes specified in (A) and (B) of paragraph (i) above (such notice being hereinafter referred to as the "Notice of Impaired Security"), the Secretary may limit the availability of Pledged Grants by withholding amounts at the time a Pledged Grant is approved or by disapproving payment requests (drawdowns) submitted with respect to Pledged Grants. (iii) If after 60 days from the Notice of Impaired Security the Secretary (in the Secretary's sole discretion) determines that Pledged Grants are still unlikely to be available for either of the purposes specified in (A) and (B) of paragraph (i) above, the Secretary may declare the Note in Default and exercise any and all remedies available under paragraph 12. This paragraph (iii) shall not affect the right of the Secretary to declare the Note and/or this Contract in Default pursuant to paragraph 11 and to exercise in connection therewith any and all remedies available under paragraph 12. (iv) All notices and submissions provided for hereunder shall be submitted as directed in paragraph 12(f) above. [Rest of Page Intentionally Left Blank] • 0 Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* THE UNDERSIGNED, as authorized officials on behalf of the Borrower or the Secretary, have executed this Contract for Loan Guarantee Assistance, which shall be effective upon delivery of the Note and Guarantee as of the Public Offering Date (except that paragraphs 4 and 15(a) hereof shall be effective when this Contract is executed on behalf of the Borrower and delivered to the Secretary). 14 The City of National City, CA BORROWER BY: tSignature) LOA 0 ., r� a (Name) 1144 '(Tit Y- 2-3 - Zo "s-- (Date) SECRETARY OF HOUSING AND URBAN DEVELOPMENT BY: (Signature Marion Mollegen McFadden (Name) Deputy Assistant Secretary for Grant Programs (Title) MAY 2 8 2015 (Date) SCHEDULE P&I Note No. B-00-MC-06-0560 Principal Amount Principal Interest Rate* Optional Redemption Available Due Date YES NO $ 335,000 August 1, 2015 X $ 365,000 August 1, 2016 X $ 390,000 August 1, 2017 X $ 420,000 August 1, 2018 X $ 455,000 August 1, 2019 X $ 485,000 August 1, 2020 X $ 520,000 August 1, 2021 X $ 565,000 August 1, 2022 X $ 605,000 August 1, 2023 X $ August 1, 2024 X $ August 1, 2025 X $ August 1, 2026 X $ August 1, 2027 X $ August 1, 2028 X $ August 1, 2029 X $ August 1, 2030 X $ August 1, 2031 X $ August 1, 2032 X $ August 1, 2033 X $ August 1, 2034 X S4,140,000 = Aggregate Principal Amount Principal Amounts due on or after August 1, 2025, for which Optional Redemption is available may be redeemed, subject to the terms contained herein and in the Trust Agreement, on any Interest Due Date on or after August 1, 2024. *The fixed rate applicable to each Principal Amount shall be listed by the Secretary. RESOLUTION NO. 2015 — 53 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING THE CITY TO PARTICIPATE IN A U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT PUBLIC OFFERING AS PART OF THE SECTION 108 LOAN GUARANTEE ASSISTANCE PROGRAM TO REFINANCE THE EXISTING NOTE IN THE ORIGINAL PRINCIPAL AMOUNT OF $6,900,000 USED TO FUND THE CONSTRUCTION OF FIRE STATION 34 WHEREAS, on July 15, 2003, the City Council adopted Resolution No. 2003- 103 authorizing an application seeking loan guarantee assistance under Section 108 of the Housing and Community Development Act of 1974, as amended, from the United States Department of Housing and Urban Development ("HUD"), and accepting HUD's guarantee of Section 108 note number B-00-MC-06-0560 for the construction of the new main fire station, Fire Station 34, under a Section 108 Contract for Loan Guarantee Assistance executed by the Mayor on July 20, 2003; and WHEREAS, the assistance provided by HUD was the guarantee of a note in the original principal amount of $6,900,000, plus interest thereon; and WHEREAS, HUD has notified the City of National City ("Borrower") that a public offering will occur in May 2015, and to participate, the Borrower must immediately notify HUD of its intention to refinance all or a portion of its existing Section 108 commitment through the public offering; and WHEREAS, HUD may require, as a condition of participation in the public offering, that the Borrower execute documents related to the transaction, and whereas the Borrower has previously agreed to pay the Borrower's share, as determined by HUD, of the customary and usual issuance, underwriting, and other costs related to the public offering and future administration of the Note and the trust certificates; and WHEREAS, it is economically sound and in the best interest of the Borrower to accept more favorable fixed rates of interest under the Section 108 Loan Guarantee Program offered by HUD under the public offering. NOW THEREFORE BE IT RESOLVED that the City Council of the City of National City hereby authorizes the Mayor, or his duly authorized agent, to notify HUD of the City of National City's desire to participate in the May 2015 public offering by HUD through the Loan Guarantee Assistance Program under Section 108 of the Housing and Community Development Act of 1974, as amended, for the existing obligation B-00-MC-06-0560 in the original principal amount of $6,900,000, and to refinance the current estimated amount of $4,140,000 at such rates of interest that will be determined by HUD at the time of the public offering. BE IT FURTHER RESOLVED that the City Council of the City of National City hereby authorizes the Mayor to execute the necessary documents as required by HUD to refinance the existing guaranteed Section 108 Note, and to execute such other documents, contracts, amendments, and agreements with HUD. BE IT FURTHER RESOLVED that the City Council hereby authorizes payment of any required fees, as may be necessary to effectuate this refinancing transaction. Resolution No. 2015 — 53 Page Two PASSED and ADOPTED this 21 st day of April, 2015. ATTEST: fi Mierk Mich el R. Dalla, C PROVED AS TO FORM: Claudia Gaci ua Silva City Attorney 74------ Morrison, Mayor Passed and adopted by the Council of the City of National City, California, on April 21, 2015 by the following vote, to -wit: Ayes: Councilmembers Cano, Mendivil, Morrison, Rios, Sotelo-Solis. Nays: None. Absent: None. Abstain: None. AUTHENTICATED BY: RON MORRISON Mayor of the City of National City, California ,t,ZtJii/ City Cl rk of the City of National City, California By: Deputy I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 2015-53 of the City of National City, California, passed and adopted by the Council of said City on April 21, 2015. City Clerk of the City of National City, California By: Deputy CITY OF NATIONAL CITY, CALIFORNIA COUNCIL AGENDA STATEMENT Ca00 3-a1 MEETING DATE: April 21, 2015 AGENDA ITEM NO. 15 ITEM TITLE: Resolution authorizing the City of National City to participate in a U.S. Department of Housing and Urban Development public offering as part of the Section 108 Loan Guarantee Assistance Program to refinance the existing note in the original principal amount of $6,900,000 used to fund the construction of Fire Station 34. (Housing, Grants, and Asset Management) PREPARED BY: Jocker Alejandro, Property Agent PHONE: 619-336-4260 EXPLANATION: (Please see attached background report). DEPARTMENT: APPROV using, Grants, & Asset agment / P FINANCIAL STATEMENT: APPROVED: �. ACCOUNT NO. APPROVED: 001-419-475-213-0000 Contract Services: $20,700 for cost of issuance. Please see Background Report for financial analysis. The City will save approximately $630,000 through the remaining term of the loan. ENVIRONMENTAL REVIEW: N/A ORDINANCE: INTRODUCTION: FINAL ADOPTION: Finance MIS STAFF RECOMMENDATION: Adopt the resolution. BOARD / COMMISSION RECOMMENDATION: ATTACHMENTS: 1. Background Report 2. HUD transmittal letter 3. Fixed Rate Note for Series 2015-A Certificates 4. Contract for Fixed Rate Note, Entitlement 5. Public Offering Legal Opinion Letter 6. Supplement to Trust Agreement V,1/4,soA.v1\c - No• Attachment 1 Background Report The Housing and Urban Development (HUD) department launched a new Section 108 public offering scheduled for May 28, 2015. In 2003 the City of National City was approved by HUD to obtain a $6.9 million loan for the purpose of constructing a new main fire station, Fire Station 34. The City of National City has a series 2003-A note with an outstanding balance of approximately $4,140,000, in relation to Fire Station 34. After much analysis, HUD has determined that the City could save the municipality a substantial amount of money if the City chose to refinance this balance ($4,140,000) in the public offering. The City's series 2003-A note qualifies for HUD's new Section 108 public offering. If the City decides to participate in the 2015 public offering, there are several items to be considered: • The estimate of savings is based on recently quoted yields on US Treasury obligations, which may be either higher or lower when the public offering rates are finalized in May. • The issuance of a new note may require a resolution/ordinance (or other action) by your governing body (i.e., if the original resolution/ordinance does not contain language/flexibility that would allow community to go forward with the financing opportunity). You should consult with your counsel at the earliest opportunity to determine if such a resolution/ordinance is required for refinancing your current note. • The new note will not be prepayable, but it can be defeased at any time as provided in the Section 108 Contract. • You will have to pay issuance costs on the new note, which will probably be in the range of '/2 of 1% of the loan amount. HUD has indicated that the cost of issuance is '/z% ($20,700). • The terms of the new promissory note must be exactly the same as the existing promissory note (for example, the principal payment schedule will remain the same and the security provisions of the existing note will apply to the new note). • If the Section 108 funds were loaned to a third -party borrower, you will want to discuss the refinancing option with the third -party entity at your earliest opportunity and determine if the refinancing will work for all parties. • To enable the refinancing, the existing note will be defeased on the closing date of the public offering by depositing cash in an account with the Section 108 Trustee sufficient to prepay the outstanding balance on August 1, 2015 and to pay interest through that date. The Trustee will transfer the proceeds of the Municipality's new note into the defeasance account, including all remaining residual balances and will be responsible for remitting the interest payment as well as the issuance costs. For further illustration, the following tables will show the debt service for the current note, the savings that could be realized if the City decides to participate, and the estimated rates. Attachment 1 Debt Service BORROWER: NATIONAL CITYCA AMOUNT: $ 4,140,000 AVG. LIFE: 5.48 SERIES: 2003-A MATURITY 1-Aug-2015 1-Aug-2016 1-Aug-2017 1-Aug-2018 1-Aug-2019 1-Aug-2020 1-Aug-2021 1-Aug-2022 1-Aug-2023 1-Aug-2024 INTEREST RATE 5.07% 5.19% 5.29% 5.38% 5.46% 5.53% 5.59% 5.64% 5.69% 0.00% NOTE OUTSTANDING AMOUNT BALANCE 335,000 3,805,000 365,000 3,440,000 390,000 3,050,000 420,000 2,630,000 455,000 2,175,000 485,000 1,690,000 520,000 1,170,000 565,000 605,000 605,000 0 TOTAL OUTSTANDING DATE PAYMENT INTEREST PRINCIPAL BALANCE 4,140,000 01-Aug-15 448,088.50 113,088.50 335,000 3,805,000 5.07% 01-Feb-16 104,596.25 104,596.25 3,805,000 01-Aug-16 469,596.25 104,596.25 365,000 3,440,000 5.19% 01-Feb-17 95,124.50 95,124.50 3,440,000 01-Aug-17 485,124.50 95,124.50 390,000 3,050,000 5.29% 01-Feb-18 84,809.00 84,809.00 3,050,000 01-Aug-18 504,809.00 84,809.00 420,000 2,630,000 5.38% 01-Feb-19 73,511.00 73,511.00 2,630,000 01-Aug-19 528,511.00 73,511.00 455,000 2,175,000 5.46% 01-Feb-20 61,089.50 61,089.50 2,175,000 01-Aug-20 546,089.50 61,089.50 485,000 1,690,000 5.53% 01-Feb-21 47,679.25 47,679.25 1,690,000 01-Aug-21 567,679.25 47,679.25 520,000 1,170,000 5.59% 01-Feb-22 33,145.25 33,145.25 1,170,000 01-Aug-22 598,145.25 33,145.25 565,000 605,000 5.64% 01-Feb-23 17,212.25 17,212.25 605,000 01-Aug-23 622,212.25 17,212.25 605,000 0 5.69% 01-Feb-24 0.00 0.00 0 01-Aug-24 0.00 0.00 0 0 0.00% NOTE: This schedule reflects HUD's estimate of amounts due, based on the interest rates in the public offering. However, these estimates are subject to confirmation by the Trustee - Bank of New York. Attachment 1 Projected Savings BORROWER: NATIONAL CITYCA AMOUNT OF NEW NOTE: $ 4,140,000 INTEREST PAYABLE - CURRENT: $ INTEREST PAYABLE - PROJECTED: INTEREST PAYABLE ON CURRENT NOTE: ESTIMATED ISSUANCE COSTS: NET SAVINGS: NPV OF INTEREST SAVINGS: $ 1,147,422.50 (383,410.15) (113,088.50) (20,700.00) 630,223.85 593,067.54 EXISTING INTEREST MATURITY RATE(S) 1-Aug-2015 5.07% 1-Aug-2016 5.19% 1-Aug-2017 5.29% 1-Aug-2018 5.38% 1-Aug-2019 5.46% 1-Aug-2020 5.53% 1-Aug-2021 5.59% 1-Aug-2022 5.64% 1-Aug-2023 5.69% 1-Aug-2024 0.00% * as of: PROJECTED INTEREST RATE(S)'_ 0.35% 0.55% 0.90% 1.35% 1.75% 1.90% 2.13% 2.18% 2.39% 2.49% March 27, 2015 PRINCIPAL INSTALLMENT 335,000 365,000 390,000 420,000 455,000 485,000 520,000 565,000 605,000 OUTSTANDING BALANCE 3,805,000 3,440,000 3,050,000 2,630,000 2,175,000 1,690,000 1,170,000 605,000 3 Attachment 1 Projected Calculations TOTAL OUTSTANDING DATE PAYMENT INTEREST PRINCIPAL BALANCE 0.87% 4,140,000 Offering Date 28-May-15 01-Aug-15 346,775.11 11,775.11 335,000 3,805,000 0,57% 0.35% 101,313.39 0.38 101,000.41 119,315.07 01-Feb-16 33,056.91 33,056,91 3,805,000 1.74% 71,539.34 1.36 70,696.42 0.00 01-Aug-16 398,056.91 33,056,91 365,000 3,440,000 1.74% 0.55% 71,539.34 2.36 70,086,59 862,000.00 01-Feb-17 32,049.51 32,049.51 3,440,000 1.86% 63,074.99 3.37 61,255.27 0,00 01-Aug-17 422,049.51 32,049.51 390,000 3,050,000 1.86% 0.90% 63,074.99 4.36 60,729.77 1,701,041,10 01-Feb-18 30,290.61 30,290,61 3,050,000 1.99% 54,518,39 5.37 52,033.58 0.00. 01-Aug-18 450,290.61 30,290.61 420,000 2,630,000 1.99%. 1.35% 54,518.39 6.36 51,587.19 2,671,890.41 01-Feb-19 27,457.71 27,457.71 2,630,000 2.095/0 46,053.29 7.37 43,197.22 0,00 01-Aug-19 482.457.71 27,457.71 455,000. 2,175,000 2,09% 1.75% 46,053.29 8.36. 42,826.64 3,804,547.95 01-Feb-20 23.487.83 23,487,83 2,175,000 2.16% 37,601,67 9.37 34.662,24 0.00 01-Aug-20 508,487.83 23,487.83 485,000 1,690,000 2.16% 1.905/0 37,601.67 10.37 34,383.25 5,028,054.79 01-Feb-21 18,892.45 18,892.45 1,690,000 2.24% 28,786,80 11.38 26.078.14 0.00 01-Aug-21 538,892.45 18,892.45 520,000 1,170,000 2.24% 2,13% 28.786.80 12.37 25,854.43 6,430,904.11 01-Feb-22 13,364,85 13,364.85 1,170,000 2.28% 19,780.40 i 13.38 17,610.54 0.00 01-Aug-22 578,364.85 13,364,85 565,000 605,000 2.28% 2.18% 19,780.40 14.37 17,459,47 8,117,424.66 01-Feb-23 7,217.65 7,217.65 605,000 2.39% 9.994.60 15.38 8,744,95 0.00 01-Aug-23 612,217.65 7,217.65 605,000 0 2.39% 2,39% 9,994.60 16.37 8,669.93 9,902,109.59 01-Feb-24 0.00 0.00 0 ' #DIV/0! 0.00 17.38 0.00 0.00 01-Aug-24 0,00 0.00 0 0' #DIV/0! 2.49% 0.00 18.37 0.00 0,00 764,012,35 726,856,04 38,637,287.67 NOTE. This schedule reflects HUD's estimate of amounts due, based on the interest rates in the public offering. However, these estimates are subject to confirmation by the Trustee - Bank of New York. Rates MATURITY 1-Aug-2006 1-Aug-2007 1-Aug-2008 1-Aug-2009 1-Aug-2010 1-Aug-2011 1-Aug-2012 1-Aug-20 13 1-Aug-2014 1-Aug-2015 1-Aug-2016 1-Aug-2017 1-Aug-20 18 1-Aug-2019 1-Aug-2020 1-Aug-2021 1-Aug-2022 1-Aug-2023 1-Aug-2024 1-Aug-2025 1-Aug-2026 SERFS 1994-A 1995-A 1996-A 1997-A 1999-A 2000-A 2001-A 2002-A 2003-A 2004-A 2006-A 1994-A 1995-A 1996-A 1997-A 1999-A SERIES 2000-A 2001-A 2002- 6.76% 8.477o 7.055/a 6.46% 5.75% 7.13% 5.20% 3.45% 2.415/0 3.09% 0.00% 6,85% 8.57% 7.14% 6.49% 5.78% 7.22% 5.33% 3.80% 2.97/o 3.62% 5.23% 6.93% B.67% 7.24% 6.61% 5.83% 7.22% 5.53% 4.16% 3.51% 4.00% 5.07%% 6,93% B.77% 7.31% 6.70% 5.96% 7.20% 5.67% 4.43% 3.82% 4.32% 4.96% 7.00% 8.86% 7.38% 6.78% 6.06% 7.45% 5.75% 4.67% 4,15% 4.57% 4,99% 7.08% 8.91% 7.45% 6.835/0 6.16% 7.50% 5.60% 4.85% 4.44% 4.795/0 5.02% 7.13% B.93% 7.51% 6.88% 6.265/a 7.65% 6.00% 4.99% 4.6649 4.96% 5.03% 7.18% 8.98% 7.57% 6.93% 6.33% 7.72% 6,08% 5.29% 4.83% 5.08% 5.05% 0.005/0 9.03% 7.63% 6.98% 6.415/0 7.76% 6.17% 5.43% 4.93% 5.195/0 5.07% 0.00% 0.00% 7.665/0 7.03% 6.49% 7.81% 6,25% 5.56% 5.07% 5.36% 5.09% 0.00% 0.00% 0.00% 7.08% 6.59% 7.86% 6.36% 5.675/0 5.195/0 5.48% 5.11% 0.00% 0.00% 0.00% 7.13% 6.66% 7.91% 6.45% 5.77540 5.29% 5.59% 5.30% 0.00% 0.00% 0.00% 0.00% 6.72% 7.93% 6,51% 5.85% 5.38% 5.68% 5.38% 0.00% 0.00% 0.00% 0.00% 0.00% 7.96% 6.56% 5.935/0 5.46% 5.76% 5,45% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 6.62% 6.00% 5.53% 5.81% 5.51% 0.00% 0.00% 0.00 % 0.00% 0.00% 0.00% 6,67% 6.07 % 5.59% 5,87% 5.570 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 6.12% 5.64% 5.92% 5.62% 0.00% 0.005/0 0.00% 0,00% 0.00% 0.00% 0.00% 0.00% 5,69% 5.97% 5.66% 0.00% 0,00% 0.00% 0.00% 0.00% 0.00% 0,00% 0.00% 0.00% 6.01% 5.70% 0.00% 0.00 0 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 5.74% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 5.775/0 1995-A 2 1996-A 3 1997-A 4 1999-A 5 2000-A 6 2001-A 7 2002-A 8 2003-A 9 2004-A 10 2006-A 11 MATURITY MATURITY 1-Ag-2006 1-Aug-2007 1-Pig-2098 1-Aug-2009 1-Aug-201 1-Aug-2011 1-7Wg2012 1-Aug2013 1-Aug-2014 1-Aug2015 L/wg-2016 1dwg2017 1-/ug2018 1-Aug-2019 1-Aug-2020 1-Aug2021 1.5 -2022 1-Aug2023 1-Aug-2024 1-Aug-2025 Aug-2026 6.78% 6.85% 6.93% 6.93% 7.00% 7.08% 7.13% 7,16% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 500% 0.00% 0,00% 0.00% 0.00% 0.00% 0.00% 8.47% 8.57% 8.67% 8.77% 8.0870 8.91% 8.93% 8.96% 9.03% 0.00% 0.00% 0.00% 0.00% 0.00% 000% 0.00% 0,00% 0.00% 0.00% 0.00% 0.00% 7.05% 7.14% 7.24% 7.31% 7.38% 7.45% 7.51% 7,57% 7,8388 7.66% 0.00% 0.00% 0.00% 0.00% 0.00% 0,00% 0.00% 0.00% 0.00% 0.00% 0.00% 6.46% 6.40% 6.61% 6.70% 6.78% 6.83% 6.88% 6.93% 6.98% 7.03% 7.08% 7.13% 0.00% 0,00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0-00% 5.75% 5.78% 583% 5.96% 6.06% 6.16% 6.26% 6.33% 641% 6,4974 6.59% 6.66% 6.7258 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 7.13% 7.22% 7.22% 7.20% 7.45% 7.50% 7,85% 7.72% 7.78% 7.81% 7.86% 7.91% 7.93% 7.98% 0.00% 0.00°% 0.00% 0.00% 0.00% 0,00% 0.00% 520% 5,3350 5.53% 5.67% 5.75% 5.80% 8.00% 6.08% 6.17% 6.25% 6.36% 5.45% 6.51% 6.56% 8.62% 6.67% 0.00% 0.00% 0.00% 0.00% 0.00% 3.45% 3.80% 4.16% 4.43% 4.67% 4.85% 4.99% 5.29% 5.43% 5.56% 5.67% 5.77% 5.85% 5.93% 6.00% 6.07% 6.12% 0.00% 0,00% 0.00% 0.00% 2.41% 2.97% 3.51% 3.82% 4.15% 444% 4.66% 483% 493% 5.07% 5.19% 5.2986 5.38% 5.46% 5.53% 5.59% 5,64% 5.69% 0.00% 0.00% 0.00% 3.09% 3.6250 4.00% 4.32% 4.57% 4.79% 4.96% 5.08% 5.19% 53670 5.48% 5.59% 5.68% 5185 5.81% 5.87% 5.82% 5.97/e 6.01% 0.00% 0.00% 0.00% 5.23% 5.01% 4.96% 4.99% 5.02% 5.03% 5.05% 5,07% 509% 511% 530% 5.38% 5.45% 5.51% 5.57% 5.62% 5.66% 570% 5.74% 5.77% Attachment 1 Sources and Uses of Funds in Defeasance Account BORROWER: NATIONAL CITYCA SERIES: 2003-A CURRENT LOAN BALANCE: 4,140,000 NEW NOTE AMOUNT: 4,140,000 FIRST OPTIONAL REDEMPTION DATE: 8/1/2015 SOURCES OF FUNDS IN DEFEASANCE ACCOUNT TRUSTEE TRANSFERS PROCEEDS FROM NEW NOTE: $ 4,119,300 BORROWER REMITS ISSUANCE COSTS: 20,700 BORROWER REMITS CURRENT NOTES LAST INT PAYMENT: 113,089 TOTAL SOURCES: $ 4,253,089 USES OF FUNDS IN DEFEASANCE ACCOUNT INTEREST PAYMENT DUE ON 8/1/2015: (113,089) SCHEDULED PRINCIPAL PAYMENT ON 8/1/2015: (335,000) PREPAYMENT OF FUTURE PRINCIPAL PAYMENTS: (3,805,000) TOTAL USES: $ (4,253,089) *TOTAL AMOUNT REMITTED BY BORROWER: $ 133,789 If the City decides to participate in the program, it could realize savings over approximately $630,000.00. Staff is recommending the City Council of the City of National City to participate in the program. Attachment 2 2015 PO transmit All Borrowers Conversion -Fully Advanced 4-7-15 U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT WASHINGTON, D.C. 20410-7000 OFFICE OF THE ASSISTANT SECRETARY FOR COMMUNITY PLANNING AND DEVELOPMENT April 10. 2015 Dear Sir or Madam: Enclosed are documents that the City of National City (the "Borrower") requested related to the pending public offering of trust certificates guaranteed under Section 108 of the Housing and Community Development Act of 1974, as amended. The public offering date is firm for May 28, 2015, except for adverse market conditions. The offering will be underwritten by Credit Suisse Securities (USA) LLC and Bank of America Merrill Lynch. Capitalized terms used in this letter are more fully defined in the enclosed documents. Even though the public offering will not be held until May 28, 2015, it is necessary that the Department of Housing and Urban Development (HUD) receive the properly executed documents from you by close of business on May 5, 2015. We must verify that we have all documents from all Borrowers, and that they are satisfactory, before pricing and before we can sign the Underwriting Agreement. If we do not receive the documents from you by May 5, your note will not be included in the public offering on May 28. This underwritten public offering will be conducted pursuant to legislation which permits HUD to guarantee trust certificates that are backed by a trust composed of notes or other obligations guaranteed under Section 108. Your note will be included in such a trust, together with the notes of other participating Borrowers. Previously executed Note(s) converting from interim financing to permanent, fixed rate financing will be delivered by/on behalf of the Holder to The Bank of New York Mellon, as Trustee, two days before the public offering date and will be held in trust. At closing, the Trustee will issue a single, separate certificate for each Principal Due Date specified in the Note. Each such certificate shall specify the applicable pass -through interest rate, which rate(s) will also be entered in the Schedule P&I attached to the Note for the applicable Principal Due Dates. An interest rate will be established for each trust certificate at pricing by the underwriters one week before the public offering date. Enclosed are a Schedule P&I for your Note(s) and wire transfer instructions in connection with the offering. The Schedule P&I must be executed by an authorized representative of the Borrower [it is preferable, but not required, that documents be signed in blue ink]. The Aggregate Principal Amount of the Note shall be repaid in accordance with the enclosed Schedule P&I. Please verify that the Principal Amounts (payments) shown are correct, as they may not be changed after the offering. Interest will accrue on each Principal Amount at the pass -through interest rate on the related trust certificate, payable on the applicable Interest Due Dates (each February 1 or August 1, beginning August 1, 2015), through the Principal Due Date on the Schedule P&I, which dates correspond to the related distribution dates of payments to investors on the trust certificates). Each interest payment will consist of the aggregate of the Attachment 2 interest amounts accrued to the applicable date on the entire principal balance of the Note. However, all payments on the Note are actually due to the Trustee on the Note Payment Date seven Business Days before the applicable Interest Due Date or Principal Due Date. This is necessary to enable the Trustee to aggregate the payments and direct them to the proper investors, and also to enable HUD to honor its Guarantee by making payment on behalf of the Borrower from pledged grant funds if necessary. You will be notified by the Trustee of the amount of the required payment one month before each Note Payment Date. The previously -executed Contract for Loan Guarantee Assistance Under Section 108 (the Contract) provides when and how payment of the costs/fees of the public offering is to be made. The final amount of the costs will not be known until the week before the public offering date. We will notify you of the amount at that time, as well as the amount of accrued interest payable on interim note Advances being paid off at the offering, if applicable. The enclosed form for wire transfer of funds provides the information that you will need to remit the costs of the public offering as well as the next scheduled payment on the previously issued Note. These funds must be remitted no later than 10:30 a.m., May 27, 2015. You submitted an opinion of counsel with previously executed financing documents pursuant to paragraph 4(b) of the Contract. If only a Schedule P&I is being executed at this time, then no further opinion of counsel is required. Please return the executed documents and the legal opinion by May 5, 2015, to: U.S. Department of Housing and Urban Development Attention: Paul Webster, Director Financial Management Division 451 Seventh St., SW, Room 7180 Washington, D.C. 20410 If you have any questions regarding this letter, please contact either myself or Terry Rouch at 202-402-7066, or send an email to paul.webster@hud.gov and Terry.E.Rouch@hud.gov (please be sure to copy both addresses). If your counsel has any questions about the legal opinion, please have your counsel contact Carey Whitehead or Makani Drummond of our Office of General Counsel at (202) 402-3106 or (202) 402-6192, respectively, or by email at carev.c.whitehead@hud.gov or Makani.D.Drummond(a hud.gov Sincerely, Paul Webster Director Financial Management Division Enclosures Attachment 3 Fixed Rate Note 2015-A 2034 DEFEASING 4-06-15 U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Fixed Rate Note for Series 2015-A Certificates BORROWER: The City of National City, CA NOTE NO. B-00-MC-06-0560 REGISTERED HOLDER: THE BANK OF NEW YORK MELLON AGGREGATE PRINCIPAL AMOUNT: $4,140,000 DATE: For value received, the undersigned, the City of National City (the "Borrower," which term includes any successors or assigns), a public entity or agency organized and existing under the laws of the State (or Commonwealth, if applicable) of California, promises to pay to the order of THE BANK OF NEW YORK MELLON, as Registered Holder (the "Holder," which term includes any successors or assigns), the Principal Amounts set forth on the attached Schedule P&I as of each applicable Principal Due Date set forth therein, together with interest on such unpaid Principal Amounts at the rates applicable thereto as specified on such attached Schedule P&I. Interest shall be calculated and payments shall be made in the manner set forth below. The Holder is acting hereunder on behalf of a trust (the "Trust") created pursuant to a Trust Agreement by and between the Secretary of Housing and Urban Development (the "Secretary") and Bank of New York Mellon (successor to JPMorgan Chase Bank, N.A.), as trustee (the "Trustee"), dated as of January 1, 1995, as amended (the "Trust Agreement"), as supplemented by the applicable Supplement to the Trust Agreement, by and between the Secretary and the Trustee. A. Principal and Interest Interest on a Principal Amount of this Note that is due as of a given date specified on the Schedule P&I attached hereto (such date, the "Principal Due Date" for such Principal Amount) shall accrue at the per annum rate specified on such Schedule P&I from (and including) the date hereof to (but excluding) such Principal Due Date or, if applicable, to the applicable Interest Due Date on which an Optional Redemption (as defined below) occurs. The aggregate of the interest amounts accrued on the entire unpaid Principal Amount of this Note shall be due semiannually as of February 1 and August 1 of each year (each, an "Interest Due Date"), commencing on August 1, 2015, until the Aggregate Principal Amount listed on the Schedule P&I attached to this Note is paid in full. Interest shall be calculated on the basis of a 360-day year consisting of twelve 30-day months. Attachment 3 B. Optional Redemption Certain Principal Amounts indicated as being eligible for Optional Redemption on the Schedule P&I hereto may be paid, in whole or in part, at the option of the Borrower as of any Interest Due Date on or after the date specified in such Schedule (an "Optional Redemption"). In order to elect an Optional Redemption of a redeemable Principal Amount, the Borrower shall give notice of its intention to redeem a Principal Amount to the Trustee and the Secretary not less than 60 days nor more than 90 days prior to the Interest Due Date as of which the Borrower intends to redeem the Principal Amount. The Trustee shall apply any payments received in respect of Optional Redemptions in accordance with written instructions of the Borrower, as approved by the Secretary. Principal Amounts that are not indicated as being eligible for Optional Redemption on such Schedule may not be prepaid. C. Additional Definitions For purposes of this Note, the following terms shall be defined as follows: "Business Day" shall mean a day on which banking institutions in New York, New York, are not required or authorized to remain closed and on which the Federal Reserve Bank and the New York Stock Exchange are not closed. If any payment (including a payment by the Secretary) is required to be made on a day that is not a Business Day, then payment shall be made on the next Business Day. "Contract" shall mean the Contract for Loan Guarantee Assistance, and any amendments thereto, between the Secretary and the Borrower, the designated public entity named therein (if applicable), or the State named therein (if applicable), which refers to and incorporates this Note by the number hereof. D. Borrower's Timely Payment to Trustee Notwithstanding anything contained in this Note, the Borrower, in accordance with the Contract, shall be required to make all payments of interest and principal, including any Optional Redemption payments, directly to the Trustee on the seventh Business Day prior to the appropriate Interest Due Date, Principal Due Date or date of Optional Redemption, as applicable. E. Interest on Late Payments If a payment of principal or interest herein provided for has not been duly received by the Holder from either the Borrower or the Secretary by the close of business on the applicable Interest Due Date or Principal Due Date, interest shall accrue on the amount of such payment at the applicable interest rate or rates payable on this Note, from the relevant due date until the date such payment is made. Nothing in the immediately preceding sentence shall be construed as permitting or implying that the Borrower may, without the written consent of the Holder and the Secretary, modify, extend, alter or affect in any manner whatsoever the right of the Holder timely to receive any and all payments of principal and interest specified in this Note. 2 Attachment 3 F. Applicability of Fiscal Agency Agreement and Trust Agreement This Note and payments made hereunder shall be administered pursuant to the terms of the Trust Agreement and are subject to such agreement. The terms and provisions of the Trust Agreement, insofar as they affect the rights, duties and obligations of the Holder and/or the Borrower, are hereby incorporated herein and form a part of this Note. Capitalized terms not defined in this Note shall have the meanings ascribed to them in Trust Agreement. The Amended and Restated Master Fiscal Agency Agreement dated as of May 17, 2000, between the Secretary and The Bank of New York Mellon (successor to The Chase Manhattan Bank and JPMorgan Chase Bank, N.A.), as Fiscal Agent (the "Fiscal Agency Agreement") provides for The Bank of New York Mellon, acting as Fiscal Agent to perform certain duties, including the duties of registrar for this Note until this Note is canceled or a new registrar appointed in accordance with the Fiscal Agency Agreement. The Trust Agreement provides for the Trustee to perform certain duties, including the duties of paying agent and collection agent for this Note until a new Trustee is appointed in accordance with the Trust Agreement. This Note may be surrendered to the Fiscal Agent for registration of transfer or exchange, as provided in the Fiscal Agency Agreement. The Fiscal Agent and the Trustee shall permit reasonable inspection to be made of a copy of the Fiscal Agency Agreement or Trust Agreement kept on file at its corporate trust office. Neither the Fiscal Agency Agreement nor the Trust Agreement shall change the Borrower's payment obligations under this Note. G. Applicability of Contract and Secretary's Guarantee This Note evidences indebtedness incurred pursuant to and in accordance with the Contract and pursuant to Section 108 of Title I of the Housing and Community Development Act of 1974, as amended (42 U.S.C. § 5308) (the "HCD Act"). This Note is subject to the terms and provisions of the Contract, to which Contract reference is hereby made for a statement of said terms and provisions and for a description of the collateral security for this Note. The payment of principal on the applicable Principal Due Dates and of interest on the applicable Interest Due Dates under this Note is unconditionally guaranteed by the Secretary to the Holder through a guarantee (the "Guarantee"). Execution of the Secretary's Guarantee is required before this Note is effective, and such Guarantee shall be issued pursuant to and in accordance with the terms of the Contract and Section 108 of the HCD Act. H. Default A default under this Note shall occur upon failure by the Borrower to pay principal or interest on this Note when due to the Trustee hereunder. On any Interest Due Date on or after the first permissible Optional Redemption Date, if either (i) a Borrower defaults on the payment of any interest or Principal Amount when due or (ii) the Secretary gives notice of a final decision to declare the Borrower in default pursuant to the following paragraph, then the Secretary may, but is not obligated to, make an acceleration payment to the Trustee equal to the unpaid Aggregate Principal Amount of the Note, together with accrued and unpaid interest thereon to such Interest Due Date. The Secretary shall give notice of such payment on the fourteenth Business Day preceding such Interest Due Date and shall make such payment on the seventh Business Day preceding such Interest Due Date. In the event that any such acceleration payment is made from 3 Iv Attachment 3 sources other than funds pledged by the Borrower as security under the Contract (or other Borrower funds), the amounts paid on behalf of the Borrower shall be deemed to be immediately due and payable to the Secretary. Nothing in this paragraph shall be construed as permitting or implying that the Borrower may, without the written consent of the Holder and the Secretary, modify, extend, alter or affect in any manner whatsoever the right of the Holder timely to receive any and all payments of principal and interest specified in this Note. In addition, the Secretary may declare the Borrower in default under this Note if the Secretary makes a final decision in accordance with the provisions of 24 CFR § 570.913 (or any successor regulation thereof), including requirements for reasonable notice and opportunity for hearing, that the Borrower has failed to comply substantially with Title I of the HCD Act. Following the giving of such reasonable notice, the Secretary may take the remedial actions specified as available in the relevant provisions of the Contract pending the Secretary's final decision. I. Holder's Reliance on Guarantee Following a default by the Borrower under the terms of this Note, the Holder agrees to rely wholly and exclusively for repayment of this Note upon the Guarantee. The enforcement of any instruments or agreements securing or otherwise related to this Note shall be the sole responsibility of the Secretary, and the Holder shall not be responsible for the preparation, contents or administration of such instruments and agreements, or for any actions taken in connection with such instruments and agreement. The Holder, to the extent it is legally able to do so, shall bind or cause to be bound its successors and assigns to all limitations imposed upon the Holder by this Note. J. Amendment This Note may only be amended with the prior written consent of the Secretary and the Borrower. No such amendment shall reduce, without the prior written consent of the Holder of this Note, in any manner the amount of, or delay the timing of, payments required to be received on this Note by the Holder or Trustee, including Guarantee Payments. K. Waivers The Borrower hereby waives any requirement for presentment, protest or other demand or notice with respect to this Note. The Borrower hereby waives notice of default and opportunity for hearing for any failure to make a payment when due. L. Delivery and Effective Date This Note is deemed issued, executed, and delivered on behalf of the Borrower by its authorized official as an obligation guaranteed by the Secretary pursuant to Section 108 of the HCD Act, effective as of the date of the Secretary's Guarantee. 4 Attachment 3 M. Borrower Specific Provisions Proceeds of this Note shall be used solely for the purpose of refinancing, through defeasance, funds advanced under previous Note(s) having the same Note number. [Remainder of Page Intentionally Left Blank] 5 l Attachment 3 THE UNDERSIGNED, as an authorized official of the Borrower, has executed and delivered this Note. The City of National City, CA BORROWER BY: (Signature) (Name) (Title) 6 13 Attachment 3 SCHEDULE P&I Note No. B-00-MC-06-0560 Principal Amount Principal Interest Rate* Optional Redemption Available Due Date YES NO $ 335,000 August 1, 2015 X $ 365,000 August 1, 2016 X $ 390,000 August 1, 2017 X $ 420,000 August 1, 2018 X $ 455,000 August 1, 2019 X $ 485,000 August 1, 2020 X $ 520,000 August 1, 2021 X $ 565,000 August 1, 2022 X $ 605,000 August 1, 2023 X $ August 1, 2024 X $ August 1, 2025 X $ August 1, 2026 X $ August 1, 2027 X $ August 1, 2028 X $ August 1, 2029 X $ August 1, 2030 X $ August 1, 2031 X $ August 1, 2032 X $ August 1, 2033 X $ August 1, 2034 X 4 140 000 = Aggregate Principal Amount Principal Amounts due on or after August 1, 2025, for which Optional Redemption is available may be redeemed, subject to the terms contained herein and in the Trust Agreement, on any Interest Due Date on or after August 1, 2024. *The fixed rate applicable to each Principal Amount shall be listed by the Secretary. Attachment 4 Contract for Fixed Rate Note, Entitlement, 04-06-15 *Defeasing* U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT CONTRACT FOR LOAN GUARANTEE ASSISTANCE UNDER SECTION 108 OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1974, AS AMENDED, 42 U.S.C. §5308 For Series HUD 2015-A Certificates This Contract for Loan Guarantee Assistance ("Contract") is entered into by the City of National City, California, as Borrower (the "Borrower"), and the Secretary of Housing and Urban Development ("Secretary"), as guarantor for the Guarantee made pursuant to section 108 ("Section 108") of title I of the Housing and Community Development Act of 1974, as amended (the "Act") and 24 CFR Part 570, Subpart M, of the promissory note executed contemporaneously herewith and numbered B-00-MC-06-0560, in the Aggregate Principal Amount of $4,140,000, and any amended note or note issued in substitution for such note and having the same note number (the "Note"). This is one of multiple Contracts under the Funding Approval ("Commitment") of the same number, which was approved by the Secretary on . Such Aggregate Principal Amount will be paid or credited to the account of the Borrower pursuant hereto, and all such amounts are collectively referred to herein as the "Guaranteed Loan Funds." The Note (including the Fiscal Agency Agreement and the Trust Agreement as defined in the Note and incorporated therein) is 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 Note. The Fiscal Agency Agreement and the Trust Agreement are sometimes collectively referred to herein as the "Fiscal Agency/Trust Agreements," and the Fiscal Agent and the Trustee are sometimes collectively referred to as the "Fiscal Agent/Trustee." PART I A. The Note. The Note is payable to the Trustee as Registered Holder. On the Public Offering Date, it is expected that trust certificates backed by the Note and similar notes issued by other Section 108 borrowers, denominated "Section 108 Government Guaranteed Participation Certificates Series HUD 2015-A," will be purchased for a purchase price of the full Aggregate Principal Amounts thereof by underwriters selected by the Secretary (the "Underwriters") pursuant to an Underwriting Agreement between the Underwriters and the Secretary, at a closing on such Public Offering Date as determined by the Secretary and the Underwriters. The Borrower agrees that the interest rate at which the trust certificate of a specified maturity is sold to the Underwriters shall be the interest rate inserted on the Public Offering Date in Schedule P&I of the Note for the Attachment 4 Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* Principal Amount of corresponding maturity. The Note shall be effective as an obligation of the Borrower only upon its delivery by the Secretary to the Fiscal Agent/Trustee and sale to the Underwriters at the closing on the Public Offering Date. The Borrower authorizes the Secretary to deliver the Note, together with the Secretary's Guarantee thereof, to the Fiscal Agent/Trustee as of such closing on the Public Offering Date, in accordance with the Fiscal Agency/Trust Agreements. After the Public Offering Date, the Borrower agrees that the Trustee pursuant to the Trust Agreement will maintain the books and records of all payments on the Note and all Principal Amounts and interest rates on such Principal Amounts. B. Consents. By execution of this Contract, the Borrower ratifies and consents to the Secretary's selection of the Underwriters and authorizes the Secretary to negotiate with the Underwriters the terms of the Underwriting Agreement and of the public offering of interests in the trust certificates to investors (including the applicable interest rates). In addition, by execution hereof the Borrower ratifies and consents to the Secretary's selection of the Fiscal Agent/Trustee and agrees to the respective terms of the Fiscal Agency/Trust Agreements. C. Prior Contracts. As of the date of the Secretary's Guarantee of the Note, this Contract supersedes any prior Contract for Loan Guarantee Assistance entered into between the parties with respect to the Guaranteed Loan Funds, the terms of the Secretary's Guarantee, and any other matter covered by this Contract, provided that any such prior contract continues to govern any action taken by the Borrower or the Secretary pursuant thereto and prior to the Secretary's Guarantee of the Note (except for the provisions of paragraph 4 of this Contract) , and further provided that this Contract does not supersede such prior contract with respect to any note having the same note number other than the promissory note identified in paragraph 15(a). Notwithstanding the preceding sentence, if such prior contract contained provisions for security or other Borrower -specific terms for the benefit of the Secretary or to ensure program compliance in addition to the security identified in paragraphs 5(a), 5(b), 5(d), or 5(e) hereof, which security or other Borrower -specific terms may be generally set forth or incorporated in paragraph 5(c) (and any related provisions incorporated in paragraph 12) of such prior contract, or may be set forth in paragraph 15 or any succeeding paragraphs (including related provisions incorporated in paragraph 12) of such prior contract or any Attachment thereto, such additional security provisions or other Borrower -specific terms of the prior contract are hereby incorporated in this Contract and shall be deemed a part hereof. Attachment 4 Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* PART II 1. Receipt, Deposit and Use of Guaranteed Loan Funds. 3 (a) Except for fees and charges deducted on the Public Offering Date pursuant to paragraph 4(a) by the Fiscal Agent/Trustee, or funds used to pay off any interim note refinanced by the Note, the Guaranteed Loan Funds shall be electronically transferred in accordance with the Borrower's instructions for deposit in a separate, identifiable custodial account (the "Guaranteed Loan Funds Account") with a financial institution whose deposits or accounts are Federally insured. The Guaranteed Loan Funds Account shall be established and designated as prescribed in the attached form document entitled "Letter Agreement for Section 108 Loan Guarantee Program Custodial Account" (Attachment 1) and shall be continuously 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 shall make withdrawals from said account only for payment of the costs of Section 108 activities approved by HUD, for transfer to the Loan Repayment Account or for the temporary investment of funds pursuant to this paragraph 1(a). Such temporary investment of funds into the Guaranteed Loan Funds Investment Account shall be required within three Business Days after the balance of deposited funds exceeds the amount of the Federal deposit insurance on the Guaranteed Loan Funds Account. At that time, any balance of funds in the Guaranteed Loan Funds Account exceeding such insurance coverage shall be fully (100%) and continuously invested in Government Obligations, as defined in paragraph 10 hereof, held in the Guaranteed Loan Funds Investment Account. All temporary investments, whether or not required as above, shall be limited to Government Obligations having maturities that are consistent with the cash requirements of the approved activities. In no event shall the investments mature on or after N/A , or have maturities which exceed one year. All such investments shall be held in trust for the benefit of the Secretary by the above financial institution 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), which account shall be maintained for all 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 is required to invest, or otherwise invests, the Attachment 4 Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* 4 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 or the Guaranteed Loan Funds Investment Account must be withdrawn and disbursed by the Borrower for approved activities by N/A . Any funds remaining in either Account after this date shall be immediately transferred to the Loan Repayment Account established pursuant to paragraph 6 of this Contract. (b) The 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, until such Accounts are fully disbursed. (c) Upon the Secretary giving notice that the Borrower is in Default under this Contract or the Note, all right, title, and interest of the Borrower in and to the Guaranteed Loan Funds and Guaranteed Loan Funds Investment Accounts shall immediately vest in the Secretary for use in making payment on the Note, purchase of Government Obligations in accordance with paragraph 10, or payment of any other obligations of the Borrower under this Contract or the Fiscal Agency/Trust Agreements, in each case as elected by the Secretary in his sole discretion. 2. Payments Due on Note. The Borrower shall pay to the Fiscal Agent/Trustee, as collection agent for the Note, all amounts due pursuant to the terms of the Note. In accordance with the Note and the Fiscal Agency/Trust Agreements, payment shall be made by 3:00 P.M. (New York City time) on the seventh Business Day (the "Note Payment Date") preceding the relevant Interest Due Date or Principal Due Date (each as defined in the Note). If any Note Payment Date falls on a day that is not a Business Day, then the required payment shall be made on the next Business Day. Payment may be made by check or wire transfer. Upon final payment of all amounts due to Holders under the Note, including any payment made by the Secretary pursuant to the Guarantee, the Fiscal Agent/Trustee is required by the Fiscal Agency/Trust Agreements to return the Note to the Secretary. Upon final payment to the Secretary of any amounts due as a result of Guarantee Payments or otherwise due under Attachment 4 Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* this Contract, the Secretary will cancel and return the Note to the Borrower in discharge of the Borrower's obligations under the Note. 5 3. Selection of New Fiscal Agent or Trustee. The Secretary shall select a new Fiscal Agent or Trustee if the Fiscal Agent or Trustee resigns or is removed by the Secretary. The Borrower hereby consents in advance to any such selection and to any changes in the Fiscal Agency/Trust Agreements agreed to by any Fiscal Agent or Trustee and the Secretary, subject to paragraph 4(d) of this Contract. 4. Payments Due Fiscal Agent or Trustee; Documents to the Secretary. (a) The Borrower agrees to pay the Borrower's share, as determined by the Secretary, of the customary and usual issuance, underwriting, and other costs related to the public offering and future administration of the Note and the trust certificates, as approved by the Secretary, including the cost of reimbursement and/or compensation of the Trustee pursuant to the Trust Agreement, including Sections 3.11 and 7.01 thereof. In connection with the public offering, such payment shall either be made by wire transfer to the Trustee on the day prior to the Public Offering Date or shall be deducted from the Guaranteed Loan Funds on the Public Offering Date. (b) The Borrower shall submit to the Secretary not later than twelve (12) Business Days prior to the Public Offering Date applicable to the Note, this executed Contract, the executed Note, and an opinion acceptable to the Secretary from the Borrower's counsel to the effect that: (i) the governing body of the Borrower has authorized by resolution or ordinance, in accordance with applicable State and local law, the issuance of the Note and the execution of this Contract; (ii) the Note and this Contract are valid, binding, and enforceable obligations of the Borrower; (iii) the pledge of funds pursuant to 24 CFR §570.705(b) (2) and paragraph 5(a) of this Contract is valid and binding; and (iv) there is no outstanding litigation that will affect the validity of the Note or this Contract. In addition, the Borrower shall submit any other additional documents or opinions specifically required by this Contract (e.g., paragraph 5(c), or paragraph 15, et seq.), at the time required thereby. (c) The Borrower agrees to reimburse the Underwriters upon demand by the Secretary for the Borrower's share, as determined by the Secretary, of all reasonable out-of-pocket expenses (including reasonable fees and disbursements of counsel) incurred in connection with a proposed public offering, if the Underwriters incur such additional costs for the public offering because the Borrower withdraws from the I C) Attachment 4 Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* offering within ten Business Days of the Public Offering Date, or if the Borrower fails for any reason timely to submit in acceptable form any document required by this Contract (including paragraph 4(b)) to be submitted before the Public Offering Date. By execution and delivery of this Contract to the Secretary, the Borrower hereby expressly authorizes the Secretary to pay amounts due under this paragraph from funds pledged under paragraph 5(a) of this Contract. (d) The undertakings in paragraphs 3 and 4 of this Contract are expressly subject to the requirement that the Fiscal Agency/Trust Agreements shall in no event require payment of fees or charges, reimbursement of expenses, or any indemnification by the Borrower from any source other than funds or other security pledged, as may be augmented by Borrower -specific terms for the benefit of the Secretary, pursuant to paragraphs C, 5, or 15, et seq., of this Contract. 5. Security. The Borrower hereby pledges as security for repayment of the Note, and such other charges as may be authorized in this Contract, the following: (a) All allocations or grants which have been made or for which the Borrower may become eligible under Section 106 of the Act, as well as any grants which are or may become available to the Borrower pursuant to Section 108(q). 6 (b) Program income, as defined at 24 CFR 570.500(a)(or any successor regulation), directly generated from the use of the Guaranteed Loan Funds. (c) Other security as described in paragraph 15, et seq., or incorporated herein by paragraph C hereof, as applicable. (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. Loan Repayment Account. (a) All amounts pledged pursuant to paragraphs 5(b), 5(c), and 5(d) of this Contract shall be deposited immediately on receipt in a separate identifiable custodial account (the "Loan Repayment Account") with a financial institution whose deposits or accounts are Federally insured. The Loan Repayment Account shall be established and designated as prescribed in the attached form document entitled "Letter Agreement for Section 108 Loan Guarantee Program Custodial Account" (Attachment 1) and shall be maintained for such Attachment 4 Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* 7 pledged funds. The Loan Repayment Account need only be established if and when the Borrower receives amounts pledged pursuant to paragraph 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 shall make withdrawals from said account only for the purpose of paying interest and principal due on the Note (including the purchase of Government Obligations in accordance with paragraph 10 hereof), for payment of any other obligation of the Borrower under this Contract or the Fiscal Agency/Trust Agreements, or for the temporary investment of funds pursuant to this paragraph, until final payment and discharge of the indebtedness evidenced by the Note, unless otherwise expressly authorized by the Secretary in writing. Such temporary investment of funds shall be required within three Business Days after the balance of deposited funds exceeds the amount of the Federal deposit insurance on the Loan Repayment Account. At that time, any balance of funds in the Loan Repayment Account exceeding such insurance coverage shall be fully (100%) and continuously invested in Government Obligations, as defined in paragraph 10 hereof. All temporary investments, whether or not required as above, shall be limited to Government Obligations having maturities that are consistent with cash requirements for payment of principal and interest as required under the Note. In no event shall the maturities of such investments exceed one year. All such investments shall be held in trust for the benefit of the Secretary by the above financial institution in an account (the "Loan Repayment Investment 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), which account shall be maintained for all Government Obligations purchased with funds from the Loan Repayment Account. 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, for any month in which there are funds in such Accounts. Attachment 4 Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* 8 (c) Upon the Secretary giving notice that the Borrower is in Default under this Contract or the Note, all right, title, and interest of the Borrower in and to the Loan Repayment and Loan Repayment Investment Accounts shall immediately vest in the Secretary for use in making payment on the Note, purchase of Government Obligations in accordance with paragraph 10, or payment of any other obligation of the Borrower under this Contract or the Fiscal Agency/Trust Agreements, in each case as elected by the Secretary in his sole discretion. 7 Use of CDBG, EDI or BEDI Funds for Repayment. Any funds available to the Borrower under Section 106 of the Act (including program income derived therefrom) are authorized to be used by the Borrower for payments due on the Note, Optional Redemption (as defined in the Note), payment of any other obligation of the Borrower under this Contract or the Fiscal Agency/Trust Agreements, or the purchase of Government Obligations in accordance with paragraph 10. Any funds specifically available to the Borrower for such payments or as a debt service reserve under an EDI Grant Agreement pursuant to Section 108(q) of the Act which supports the eligible project(s) and activities financed by the Note may also be used therefor; any other use of Section 108(q) funds for such purposes shall require the prior written approval of the Secretary. Unless otherwise specifically provided herein or unless otherwise expressly authorized by the Secretary in writing, the Borrower shall substantially disburse funds available in the Loan Repayment or the Loan Repayment Investment Accounts before funds from grants under Section 106 of the Act are withdrawn from the U.S. Treasury for such purposes. 8 Secretary's Right to Restrict Use of CDBG Funds to Repayment. Upon a determination by the Secretary that payments required by paragraph 2 and/or paragraph 4 of this Contract are unlikely to be made as specified, the Secretary may give the Borrower notice that the availability to the Borrower of funds pledged under paragraph 5(a) of this Contract for purposes other than satisfaction of the pledge is being restricted. This restriction shall be in an amount estimated by the Secretary to be sufficient to ensure that the payments referred to in paragraph 2 and/or paragraph 4 hereof are made when due. This restriction may be given effect by conditioning the restricted amounts to prohibit disbursement for purposes other than satisfaction of the pledge at the time such restricted funds are approved as grants, by limiting the Borrower's ability to draw down or expend the restricted funds for other purposes, and by disapproving payment requests submitted with respect to such grants for purposes other than satisfaction of the pledge. 9 Secretary's Right to Use Pledged Funds for Repayment. The Secretary may use funds pledged under paragraph 5(a) of this Contract or funds restricted under grants pursuant to paragraph 8 of this Contract to make any payment required of the Borrower Attachment 4 Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* 9 under paragraph 2 and/or paragraph 4, if such payment has not been timely made by the Borrower. 10. Defeasance. For purposes of this Contract, the Note shall be deemed to have been paid (defeased) if there shall have been deposited with the Trustee either moneys or Government Obligations (defined below), which in the sole determination of the Secretary, mature and bear interest at times and in amounts sufficient, together with any other moneys on deposit with the Trustee for such purpose, to pay when due the principal and interest to become due on the Note. The Aggregate Principal Amount of the Note or any unpaid Principal Amount may be so defeased, in whole or in part, as of any Interest Due Date, or any other Business Day acceptable to both HUD and the Borrower. In accordance with the Note and the Trust Agreement, the Borrower shall give timely notice and written instructions to the Secretary and the Trustee concerning any principal amounts proposed to be defeased, including any Optional Redemptions proposed, which instructions shall be approved by the Secretary. If the unpaid Aggregate Principal Amount of the Note guaranteed pursuant to this Contract shall be defeased and deemed to have been paid in full, then the Borrower shall be released from all agreements, covenants, and further obligations under the Note. "Government Obligation" means a direct obligation of, or any obligation for which the full and timely payment of principal and interest is guaranteed by, the United States of America, including but not limited to, United States Treasury Certificates of Indebtedness, Notes and Bonds - State and Local Government Series or certificates of ownership of the principal of or interest on direct obligations of, or obligations unconditionally guaranteed by, the United States of America, which obligations are held in trust by a commercial bank which is a member of the Federal Reserve System and has capital and surplus (exclusive of undivided profits) in excess of $100,000,000. 11. Default. (a) A Default under the Note and this Contract shall occur upon failure by the Borrower to: (i) pay when due an installment of principal or interest on the Note; or (ii) punctually and properly perform, observe, and comply with any covenant, agreement, or condition contained in: (A) this Contract, (B) any security agreement, deed of trust, mortgage, assignment, guarantee, or other contract securing payment of indebtedness evidenced by the Note, or (C) any future amendments, modifications, restatements, renewals, or extensions of any such documents. Attachment 4 Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* 10 (b) The Borrower waives notice of Default and opportunity for hearing with respect to a Default under paragraph 11(a). (c) In addition to Defaults under paragraph 11(a), the Secretary may declare the Note in Default if the Secretary makes a final decision in accordance with the provisions of section 111 of the Act and 24 CFR 570.913 (or any successor provisions), including requirements for reasonable notice and opportunity for hearing, that the Borrower has failed to comply substantially with title I of the Act. Notwithstanding any other provision, following the giving of such reasonable notice, the Secretary may, in the Secretary's sole discretion pending the Secretary's final decision, withhold the guarantee of any or all obligations not yet guaranteed on behalf of the Borrower under outstanding commitments, and/or direct the Borrower's financial institution to: refuse to honor any instruments drawn upon, or withdrawals from, the Guaranteed Loan Funds Account or the Loan Repayment Account initiated by the Borrower, and/or refuse to release obligations and assignments by the Borrower from the Guaranteed Loan Funds Investment Account or the Loan Repayment Investment Account. 12. Remedial Actions. Upon a Default or declaration of Default under this Contract, the Secretary may, in the Secretary's sole discretion, take any or all of the following remedial actions: (a) With any funds or security pledged under this Contract, the Secretary may (i) continue to make payments due on the Note, (ii) make an acceleration payment with respect to the principal amount of the Note subject to Optional Redemption as provided in Section B of the Note, (iii) purchase Government Obligations in accordance with paragraph 10 of this Contract, (iv) pay any interest due for late payment as provided in the Note, this Contract, or the Fiscal Agency/Trust Agreements, (v) pay any other obligation of the Borrower under this Contract or the Fiscal Agency/Trust Agreements, and/or (vi) pay any reasonable expenses incurred by the Secretary or the Fiscal Agent/Trustee as result of the Borrower's Default. (b) The Secretary may withhold the guarantee of any or all obligations not yet guaranteed or the disbursement of any or all grants not yet disbursed in full under outstanding guarantee commitments or grant approvals for the Borrower under Sections 108 and/or 106 of the Act. (c) The Secretary may direct the Borrower's financial institution to: refuse to honor any instruments drawn upon, or withdrawals from, the Guaranteed Loan Funds Account or the Loan Repayment Account by the Borrower, and/or refuse to release obligations and assignments by the Borrower from the Guaranteed Loan Funds Investment Account or the Loan Repayment Investment Account; and/or direct the Borrower and/or the Borrower's Attachment 4 Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* 11 financial institution to transfer remaining balances from the Guaranteed Loan Funds Account to the Loan Repayment Account. (d) With respect to amounts subject to Optional Redemption, the Secretary may accelerate the Note. (e) The Secretary may exercise any other appropriate remedies or sanctions available by law or regulation applicable to the assistance provided under this Contract, or may institute any other action available under law, to recover Guaranteed Loan Funds or to reimburse the Secretary for any payment under the Secretary's Guarantee or any reasonable expenses incurred by the Secretary as a result of the Default. (f) All notices and submissions provided for hereunder shall be in writing (including by telex, telecopier or any other form of facsimile communication) and mailed or sent or delivered, as to each party hereto, at its address set forth below or at such other address as shall be designated by such party in a written notice to the other party hereto. All such notices and other communications shall be effective when received as follows: (i) if sent by hand delivery, upon delivery; (ii) if sent by mail, upon the earlier of the date of receipt or five Business Days after deposit in the mail, postage prepaid; (iii) if sent by telex, upon receipt by the sender of an answer back; and (iv) if sent by telecopier, upon confirmed receipt. The Secretary: U.S. Dept. of Housing and Urban Development Attention: Paul Webster, Director Financial Management Division 451 7th Street SW, Room 7180 Washington, DC 20410 Borrower: City of National City Attn: Leslie Deese, City Manager City Manager's Office 1243 National City Blvd National City, CA 91950 13. Limited Liability. Notwithstanding any other provision of this Contract, the Fiscal Agency/Trust Agreements or the Note, any recovery against the Borrower for any liability for amounts due pursuant to the Note, the Fiscal Agency/Trust Agreements and this Contract shall be limited to the sources of security pledged in paragraphs C, 5, or any Special Conditions of or Modifications to this Contract, as applicable. Neither the general credit nor the taxing power of the Borrower, or of the State in which the Borrower is located, is pledged for any Attachment 4 Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* payment due under the Note, the Contract, or the Fiscal Agency/Trust Agreements. 12 14. Incorporated Grant Agreement. The Contract and the Note are hereby incorporated in and made a part of the Grant Agreement authorized by the Secretary on under the Funding Approval for grant number B-00-MC-06-0560 to the Borrower. In carrying out activities with the Guaranteed Loan Funds hereunder, the Borrower agrees to comply with the Act and 24 CFR Part 570, as provided in Subpart M thereof. 15. Special Conditions and Modifications: (a) The Guaranteed Loan Funds shall be used only to pay principal amounts due or payable on or after August 1, 2015, under that certain promissory note issued by the Borrower and identified as Note Number B-00-MC-06-0560, Series 2003-A. The Guaranteed Loan Funds shall be deposited in a defeasance account established with the Trustee pursuant to the Contract for Loan Guarantee Assistance executed in connection with the issuance of such promissory note. The Borrower agrees to pay to the Trustee moneys in an amount equal to the amount of the interest to become due on such promissory note on August 1, 2015 for deposit in such defeasance account. Such payment shall be in addition to any payment required under paragraph 4(a) of this Contract and shall be made by wire transfer to the Trustee on the day prior to the Public Offering Date. In addition to the Secretary's rights under paragraph 9 of this Contract, the Secretary may use funds pledged under paragraph 5(a) of this Contract or funds restricted under grants pursuant to paragraph 8 of this Contract to make any payment required of the Borrower under this paragraph 15(a), if such payment has not been timely made by the Borrower. (b) Additional Grounds for Default Notice of Default. Restriction of Pledged Grants. Availability of Other Remedial Actions. (i) The Borrower acknowledges and agrees that the Secretary's guarantee of the Note is made in reliance upon the availability of grants pledged pursuant to paragraph 5(a) (individually, a "Pledged Grant" and, collectively, the "Pledged Grants") in any Federal fiscal year subsequent to the Federal fiscal year ending September 30, 2014 to: (A) pay when due the payments to become due on the Note, or (B) defease (or, if permitted, prepay) the full amount outstanding on the Note. The Borrower further acknowledges and agrees that if the Secretary (in the Secretary's sole Attachment 4 Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* 13 discretion) determines that Pledged Grants are unlikely to be available for either of such purposes, such determination shall be a permissible basis for any of the actions specified in paragraphs (ii) and (iii) below (without notice or hearing, which the Borrower expressly waives). (ii) Upon written notice from the Secretary to the Borrower at the address specified in paragraph 12(f) above that the Secretary (in the Secretary's sole discretion) has determined that Pledged Grants are unlikely to be available for either of the purposes specified in (A) and (B) of paragraph (i) above (such notice being hereinafter referred to as the "Notice of Impaired Security"), the Secretary may limit the availability of Pledged Grants by withholding amounts at the time a Pledged Grant is approved or by disapproving payment requests (drawdowns) submitted with respect to Pledged Grants. iii) If after 60 days from the Notice of Impaired Security the Secretary (in the Secretary's sole discretion) determines that Pledged Grants are still unlikely to be available for either of the purposes specified in (A) and (B) of paragraph (i) above, the Secretary may declare the Note in Default and exercise any and all remedies available under paragraph 12. This paragraph (iii) shall not affect the right of the Secretary to declare the Note and/or this Contract in Default pursuant to paragraph 11 and to exercise in connection therewith any and all remedies available under paragraph 12. (iv) All notices and submissions provided for hereunder shall be submitted as directed in paragraph 12(f) above. [Rest of Page Intentionally Left Blank] Attachment 4 Contract for Fixed Rate Note, Entitlement, 4-06-15 *Defeasing* THE UNDERSIGNED, as authorized officials on behalf of the Borrower or the Secretary, have executed this Contract for Loan Guarantee Assistance, which shall be effective upon delivery of the Note and Guarantee as of the Public Offering Date (except that paragraphs 4 and 15(a) hereof shall be effective when this Contract is executed on behalf of the Borrower and delivered to the Secretary). 14 The City of National City, CA BORROWER BY: (Signature) (Name) (Title) (Date) SECRETARY OF HOUSING AND URBAN DEVELOPMENT BY: (Signature) Marion Mollegen McFadden (Name) Deputy Assistant Secretary for Grant Programs (Title) (Date) Attachment 5 April21, 2015 Secretary of Housing and Urban Development 451 7th Street, SW Washington, DC 20410 Dear Sir or Madam: The undersigned, being duly licensed and in good standing to practice law in the State of California, is legal counsel to the City of National City ("Borrower"). As such, I have represented the Borrower regarding that certain promissory note, referred to as Note No. B-00- MC-06-0560, in the Aggregate Principal Amount of $4,140,000 ("Note"), to be executed by the Borrower payable to the order of the Registered Holder thereof, and to be guaranteed by the Secretary of Housing and Urban Development ("HUD") under section 108 of the Housing and Community Development Act of 1974, as amended, 42 U.S.C. 5308 ("Section 108"). The Note will be included in a trust created by HUD (together with other Section 108 Notes issued by other borrowers), and trust certificates based on the trust will be sold in the Series 2015-A public offering by underwriters selected by HUD. HUD's guarantee of the Note will be governed by the Contract for Loan Guarantee Assistance under Section 108 between the Borrower and HUD (the "Contract"), in which the Borrower pledges Community Development Block Grants pursuant to 24 CFR 570.705(b)(2), as well as any other security specified in the Contract, as security for HUD's guarantee. In my capacity as legal counsel, I have made an examination and investigation of all such matters of fact and questions of law as I consider necessary or advisable to enable me to render the opinion hereafter set forth. Specifically, and without limiting the generality of the foregoing, I have examined: 1. Resolution No. of the governing body of Borrower dated authorizing Borrower to enter into this transaction, and authorizing Ron Morrison, Mayo of the City of National City to execute on behalf of Borrower all documents necessary or desirable to accomplish the transaction. 2. The Contract. 3. The Note. 4. The Amended and Restated Master Fiscal Agency Agreement dated as of May 17, 2000, the Trust Agreement dated as of January 1, 1995, together with Amendment No. 1 thereto, dated June 30, 2004, and the form of Supplement to the Trust Agreement to be executed by the Secretary of HUD for the closing of the public offering. Based on the foregoing investigation and authorities, I am of the opinion that: Attachment 5 1. Borrower has authorized in accordance with applicable State and local law, the transaction, including issuance of the Note, the pledge of grant funds, and the execution of all documents necessary or desirable to accomplish the transaction. 2. Borrower has authorized, in his capacity as Mayor, to execute the Contract, the Note and all documents necessary or desirable to accomplish the transaction. 3. The Note and the Contract have been duly executed by the aforementioned authorized representative(s) of the Borrower, and upon delivery thereof, due execution of the Contract and Guarantee on behalf of HUD, and receipt of the loan proceeds on behalf of the Borrower, the Note and Contract, including the provisions for compensation of the Fiscal Agent/Trustee from funds pledged under the Contract (as incorporated therein), shall be valid, binding and enforceable obligations of the Borrower. 4. The pledge of present and future Community Development Block Grants by the Borrower pursuant to 24 CFR 570.705(b)(2) and the Contract is valid and binding. 5. There is no outstanding, or to my knowledge threatened, action, suit, proceeding, investigation or litigation by or against the Borrower that will affect the validity of the Note or the security therefor. Sincerely, Claudia G. Silva City Attorney So Attachment 6 [6-24-11] SERIES 2015-A SUPPLEMENT TO TRUST AGREEMENT relating to $4,140,000 Aggregate Original Principal Amount SECTION 108 GOVERNMENT GUARANTEED PARTICIPATION CERTIFICATES, SERIES HUD 2015-A This SUPPLEMENT (the "Series 2015-A Supplement"), is entered into by the SECRETARY OF HOUSING AND URBAN DEVELOPMENT (the "Secretary") and THE BANK OF NEW YORK MELLON (successor to JPMorgan Chase Bank, N.A.), as trustee (the "Trustee") under the Trust Agreement, dated as of January 1, 1995, by and between the Trustee and the Secretary, as sponsor of a Trust created on behalf of certain units of general local government and public agencies designated by such units of general local government (as amended or supplemented from time to time, the "Agreement"). All capitalized terms used but not defined herein have the meanings ascribed thereto in the Agreement, as amended hereby. WITNESSETH WHEREAS, pursuant to the Agreement, the Trustee is to hold in trust certain Notes guaranteed by the Secretary and to issue Series 2015-A Certificates (the "Series 2015-A Certificates") evidencing beneficial interests in a trust consisting of such Notes (the "Trust"); and WHEREAS, pursuant to the Agreement, the Secretary and the Trustee are to enter into this Series 2010-A Supplement whereby the Secretary delivers the Notes and related Guarantee to the Trustee and the Secretary directs the Trustee to issue the Series 2015-A Certificates; NOW, THEREFORE, in consideration of these premises, the parties agree as follows: 3i Attachment 6 1. Delivery and Acknowledgment. The Secretary hereby delivers to the Trustee (a) the Notes (together with any necessary endorsements thereon) listed on the attached Schedule 1, as identified by Borrower, Aggregate Principal Amounts, Principal Amounts, Principal Due Dates and interest rates and (b) the related Guarantee to hold in trust for the benefit of the Certificateholders. The Secretary acknowledges the terms and conditions of the Agreement and hereby agrees that the Trust shall be governed by the terms thereof as amended hereby. The term "Trust" as used herein shall refer to that Trust established as a result of the delivery to the Trustee of the Notes and related documents referred to herein. 2. Authority to Issue Certificates. The Secretary hereby directs the Trustee, as agent for the Secretary, to issue Series 2010-A Certificates with respect to the Trust as follows: a. Name of Series. The designation of the Series authorized hereby shall be "Section 108 Government Guaranteed Participation Certificates, Series HUD 2015-A, Guaranteed by the Secretary of Housing and Urban Development." b. Issuance of Certificates. Pursuant to Section 2.03 of the Trust Agreement, the Trustee is hereby authorized and directed to execute on behalf of the Secretary, authenticate and deliver, on this date, in the name of the Certificateholder, the Series 2015-A Certificates specified on the attached Schedule 2 against receipt of the Notes, the related Guarantee and this Series 2015-A Supplement. 3. Acknowledgments and Certifications. a. The Secretary hereby certifies that it has satisfied all conditions on its part to be performed or satisfied as a condition to the issuance of the foregoing Certificates. Without limiting the provisions of Section 3.11 and Section 7.01 of the Agreement, the Secretary further 3Z Attachment 6 certifies that the Trustee shall be paid, for services rendered in connection with the administration of the Trust assets listed on the attached Schedule 1, and pursuant to Section 7.01 of the Agreement, a fee of $20,700. b. The Trustee hereby acknowledges receipt of the Trust assets listed on the attached Schedule 1. c. This Series 2015-A Supplement shall constitute the Supplement referred to in Section 2.01 of the Agreement. 4. Modification and Ratification of the Agreement. a. Solely for purposes of this Series 2015-A Supplement and the Series 2015-A Certificates, the definition of "Note" in Article I of the Agreement is hereby deleted in its entirety and replaced as follows: "Note: Any note or other obligation issued by a Borrower, held by the Trustee on behalf of the Certificateholder(s) of a given Series, and guaranteed by the Secretary pursuant to Section 108, which is subject to this Agreement." b. Solely for purposes of this Series 2015-A Supplement and the Series 2015-A Certificates, the definition of "Record Date" in Article I of the Agreement is hereby deleted in its entirety and replaced as follows: "Record Date: With respect to a Series and any Certificates issued in global form, the Business Day immediately preceding a Distribution Date, and with respect to a Series and any Definitive Certificates, the 15th calendar day preceding a Distribution Date (whether or not a Business Day)." c. Solely for purposes of this Series 2015-A Supplement and the Series 2015-A Certificates, the first sentence of Section 2.01(b) of the Agreement is hereby deleted in its entirety and replaced as follows: 33 Attachment 6 "Each of the Borrower's Notes shall be in the form of a fully registered note or other obligation, registered in the name of the Holder." d. Solely for purposes of this Series 2015-A Supplement and the Series 2015-A Certificates, Section 3.02 of the Agreement is hereby deleted in its entirety and replaced as follows: "Any term of any Note may be modified by such amendments as may be agreed upon from time to time by the Secretary and the Borrower under such Note. No such change in the terms of any Note shall alter or affect the Secretary's Guaranty of such Note on the basis of the original terms thereof, provided that the Notes shall not be modified in a manner that would cause the related Trust to fail to be a "grantor trust" for federal income tax purposes, as intended in Section 4.02." e. Solely for purposes of this Series 2015-A Supplement and the Series 2015-A Certificates, the first paragraph of Section 3.03 of the Agreement is hereby deleted in its entirety and replaced as follows: "If so provided in the applicable Note (subject to the provisions set forth herein and in such Notes) certain Principal Amounts of the Notes may be prepayable in whole or in part at the option of the Borrower as of any Interest Due Date on or after the initial date for Optional Redemption as specified in the related Note. If no initial date for Optional Redemption is indicated in the applicable Note, no Principal Amount stated therein for such Note will be payable prior to the Note Payment Date preceding the related Principal Due Date. In order to elect an Optional Redemption of a prepayable Principal Amount, the Borrower shall Attachment 6 give notice to the Trustee, through the Secretary, of its intention to make a prepayment of principal not less than sixty (60) days nor more than ninety (90) days prior to the Interest Due Date as of which the Borrower intends to make such prepayment. The Trustee shall promptly send an acknowledgment of timely receipt, through the Secretary, of a Borrower's notice of Optional Redemption to the Director, Financial Management Division. Consistent with any such notice of Optional Redemption, the Trustee shall give notice thereof to the related Certificateholders not less than thirty (30) nor more than sixty (60) days prior to the desired redemption date. With respect to any notice by a Borrower of its intention to prepay a Note, once given by a Borrower, such notice of an Optional Redemption may not be revoked by the Borrower after the Trustee has provided notice of such Optional Redemption to the related Certificateholders. Any revocation of such notice after the Trustee has provided notice of such Optional Redemption to said Certificateholders shall be an Event of Default under the corresponding Contract. The Trustee shall apply any payments received in respect of permitted Optional Redemptions to the outstanding Principal Amount of the related Note designated in the instructions of the related Borrower set forth in the above notice of prepayment, in each case, as approved in writing by the Secretary. Notwithstanding any contrary provision in a Note with respect to the time by which payments in respect of permitted Optional Redemptions shall be received by the Trustee (the "Payment Deadline"), the related Borrower shall be entitled to make such payments to the Trustee by no later than 10:00 AM New York City time on the related Interest Due Date without thereby violating the Payment Attachment 6 Deadline. Notwithstanding anything in this Section 3.03 to the contrary, notice by the Trustee of an Optional Redemption that constitutes a final payment with respect to a Certificate shall be given in accordance with, and subject to the provisions of, Section 9.02." f. Solely for purposes of this Series 2015-A Supplement and the Series 2015-A Certificates, the first and second paragraphs of Section 3.07 of the Agreement are hereby deleted in their entirety and replaced as follows: Any Borrower may defease the unpaid aggregate Principal Amount of a Note, or the unpaid Principal Amount due on a Principal Due Date, in whole or in part, at any time, subject to the corresponding Contract and this Agreement. For each Note or Principal Amount (or portion thereof) that the related Borrower elects to defease, the Borrower shall establish and maintain with the Trustee a trust account (a "Defeasance Account"), separate and apart from all other accounts of such Borrower and the Trustee. The Borrower shall irrevocably deposit into such account either moneys or Government Obligations that, in the sole discretion of the Secretary, mature and bear interest at times and in amounts sufficient, together with the moneys already on deposit with the Trustee for such purpose, to pay when due the principal and interest to become due with respect to the related Principal Amount (or portion thereof) that the Borrower elects to defease, in accordance with the notice of the Borrower as specified below. The Borrower's election to defease shall be evidenced by giving written notices to the Trustee and the Secretary, which notices shall authorize and direct the establishment of the related Defeasance Account, shall specify the money and Attachment 6 Government Obligations to be deposited therein and shall specify the particular Principal Amounts (or portions thereof) being defeased and the related Principal Due Date(s) and Optional Redemption Date(s) (consistent with the related Note and Contract). For all purposes of this Agreement, to the extent that a Principal Amount (or portion thereof) is so specified for defeasance in accordance with the Contract, such specification shall constitute an election to redeem on the date specified in the foregoing notice for purposes of the related Note, subject to approval of the Secretary. Upon and in accordance with the Secretary's instructions pursuant to the corresponding Contract, the Trustee shall apply so much of the sums deposited into a Defeasance Account as shall be necessary to purchase the Government Obligations designated by the Secretary's instructions. If the funds deposited were insufficient, or there were excess funds deposited, the Trustee shall follow the Secretary's directions as to the disposition of such funds." g. The Agreement as modified and supplemented by this Series 2010-A Supplement with respect to the Series 2015-A Certificates (but which modification and supplement shall not apply to any other Series of Certificates unless otherwise specified in the related Supplement for such Series of Certificates) is in all respects ratified and confirmed, and the Agreement as so modified and supplemented by this Series 2015-A Supplement shall be read, taken and construed as one and the same instrument. �7 Attachment 6 IN WITNESS WHEREOF, the parties have caused this Series 2015-A Supplement to be executed as of the day of SECRETARY OF HOUSING AND URBAN DEVELOPMENT By: Name: Title: THE BANK OF NEW YORK MELLON, as Trustee By: Name: Title: Authorized Signer Attachment 6 SCHEDULE 1 TO SERIES -A SUPPLEMENT TO TRUST AGREEMENT TRUST ASSETS ASSIGNED TO TRUSTEE PRINCIPAL PRINCIPAL AMOUNT DUE DATE INTEREST RATE 3� Attachment 6 BORROWER INFORMATION [See Attached] SCHEDULE 2 TO SERIES -A SUPPLEMENT TO TRUST AGREEMENT CERTIFICATES TO BE ISSUED CUSIP Number Principal Amount Attachment 6 Maturity Date' Interest Rate Principal amounts due on or after August 1, 20_ are subject to earlier payment on any Interest Due Date on or after August 1, 20_ upon an Optional Redemption or an Acceleration Event. y/ RESOLUTION NO. 2015 — RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING THE CITY TO PARTICIPATE IN A U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT PUBLIC OFFERING AS PART OF THE SECTION 108 LOAN GUARANTEE ASSISTANCE PROGRAM TO REFINANCE THE EXISTING NOTE IN THE ORIGINAL PRINCIPAL AMOUNT OF $6,900,000 USED TO FUND THE CONSTRUCTION OF FIRE STATION 34 WHEREAS, on July 15, 2003, the City Council adopted Resolution No. 2003- 103 authorizing an application seeking loan guarantee assistance under Section 108 of the Housing and Community Development Act of 1974, as amended, from the United States Department of Housing and Urban Development ("HUD"), and accepting HUD's guarantee of Section 108 note number B-00-MC-06-0560 for the construction of the new main fire station, Fire Station 34, under a Section 108 Contract for Loan Guarantee Assistance executed by the Mayor on July 20, 2003; and WHEREAS, the assistance provided by HUD was the guarantee of a note in the original principal amount of $6,900,000, plus interest thereon; and WHEREAS, HUD has notified the City of National City ("Borrower") that a public offering will occur in May 2015, and to participate, the Borrower must immediately notify HUD of its intention to refinance all or a portion of its existing Section 108 commitment through the public offering; and WHEREAS, HUD may require, as a condition of participation in the public offering, that the Borrower execute documents related to the transaction, and whereas the Borrower has previously agreed to pay the Borrower's share, as determined by HUD, of the customary and usual issuance, underwriting, and other costs related to the public offering and future administration of the Note and the trust certificates; and WHEREAS, it is economically sound and in the best interest of the Borrower to accept more favorable fixed rates of interest under the Section 108 Loan Guarantee Program offered by HUD under the public offering. NOW THEREFORE BE IT RESOLVED that the City Council of the City of National City hereby authorizes the Mayor, or his duly authorized agent, to notify HUD of the City of National City's desire to participate in the May 2015 public offering by HUD through the Loan Guarantee Assistance Program under Section 108 of the Housing and Community Development Act of 1974, as amended, for the existing obligation B-00-MC-06-0560 in the original principal amount of $6,900,000, and to refinance the current estimated amount of $4,140,000 at such rates of interest that will be determined by HUD at the time of the public offering. BE IT FURTHER RESOLVED that the City Council of the City of National City hereby authorizes the Mayor to execute the necessary documents as required by HUD to refinance the existing guaranteed Section 108 Note, and to execute such other documents, contracts, amendments, and agreements with HUD. BE IT FURTHER RESOLVED that the City Council hereby authorizes payment of any required fees, as may be necessary to effectuate this refinancing transaction. Resolution No. 2015 — Page Two PASSED and ADOPTED this 21st day of April, 2015. Ron Morrison, Mayor ATTEST: Michael R. Dalla, City Clerk APPROVED AS TO FORM: Claudia Gacitua Silva City Attorney Esther Clemente From: Mike Dalla Sent: Tuesday, February 02, 2016 8:12 AM To: Esther Clemente Subject: FW: 2015 Public Offering Document - contract Attachments: NationalCity,CA---B-00-MC-06-0560---2015-A PO Contract-$4.14M.PDF From: Carlos Aguirre Sent: Monday, February 01, 2016 5:28 PM To: Javier Carcamo <jCarcamo@nationalcityca.gov>; Mike Dalla <MDalla@nationalcityca.gov> Cc: Angelita Marchante <amarchante@nationalcityca.gov> Subject: FW: 2015 Public Offering Document - contract Hello Mr. Dalla and Javier, Attached is the countersigned agreement for the HUD 2015 Public Offering. I have also requested a hard copy but I doubt we will get one. Thanks, Carlos Aguirre Community Development Manager City of National City (619) 336-4391 From: Allen, Hugh [mailto:HUGH.ALLEN@hud.gov] Sent: Monday, February 01, 2016 2:05 PM To: Carlos Aguirre <caguirre@nationalcityca.gov> Subject: 2015 Public Offering Document - contract Carlos, Attached is the Contract of Loan Guarantee Assistance for National City, CA related to HUD 2015 Public Offering. Hugh Allen Deputy Director Financial Management Division Office of Community Planning & Development U.S. Dept. Of Houisng & Urban Development 451 7th Street, SW Washington, DC 20410 202-402-4654 From: Ferreira, Kathleen M Sent: Monday, February 01, 2016 4:42 PM 1