HomeMy WebLinkAboutU.S. Bank National Association - Section 108 Guaranteed Loan Custodial Agreement - Peanuts ParkSECTION 108 GUARANTEED LOAN CUSTODIAL AGREEMENT
THIS AGREEMENT dated as of this 12 day of Oily 2(10, by and between
the CITY OF PASCO , a mu icipal corporation
organized and existing under the laws of the State of Washington , and having an office
for the conduct of business at 525 North Third Avenue Pasco Washington 99301
("Borrower"), and U.S. Bank National Association, a national banking association. and having an
office for the conduct of business at 14205' Avenue Seattle, WA 98101 ("Custodian"),
WITNESSETH:
WHEREAS, the Borrower will enter into a Contract for Loan Guarantee Assistance Under
Section 108 of the Housing and Community Development Act of 1974, as amended, 42 U.S.C.
§5308 ("Section 108 Contract") with the Secretary of Housing and Urban Development ("HUD")
under the authority of section 108 of title I of the Housing and Community Development Act of
1974, as amended (the "Act"); and
WHEREAS, the Custodian is a national banking association institution regulated by the
laws of the United States of America; and
WHEREAS, the parties to this agreement desire to set forth the terms and conditions for the
deposit and custodianship of the documents evidencing and relating to the loan to be originated
under section 108 of the Act, and 24 CFR part 570, subpart M; and
WHEREAS, HUD will guarantee one or more promissory notes issued by the Borrower and
numbered B -18 -MC -53-0009 that together do not exceed the principal amount of $3,781,000.00
(the "Section 108 Guaranteed Note").
NOW THEREFORE, in consideration of the mutual undertakings expressed in this
agreement, the parties agree as follows:
1. The Borrower shall from time to time deliver for deposit with the Custodian certain
Security Documents as required under the Section 108 Contract (collectively the "Security
Documents"). For each such delivery, the Borrower shall furnish the Custodian with a listing of the
Security Documents to be deposited, which listing shall be in the form set forth in the attached
Security Document List & Custodial Receipt (the "Receipt" or "Receipt(s)"). In receiving
Security Documents, and in maintaining any listing or providing any report or communication
with respect to the Security Documents, the Custodian shall be required only to review the face
of each document received to determine whether it appears regular on its face, appears to relate
to the Section 108 Guaranteed Note, and appears to be a Security Document identified in the
Receipt. The Custodian shall complete the Receipt(s) by inserting the date received next to each
delivered Security Document. Once signed by the Custodian, the Receipt(s) shall document the
Custodian's receipt(s) of the Security Documents required by the Section 108 Contract to be
deposited with the Custodian. The Custodian shall maintain each original Receipt together with the
Security Documents it identifies, in accordance with the storage requirements in paragraph 3.
2. Borrower's delivery of the Security Documents will be acknowledged by the
Custodian through execution and electronic delivery of a copy of the Receipt(s) to HUD at
108Reports@hud.gov. The Custodian shall also provide copies of Receipt(s) to the Borrower.
By its delivery of the Security Documents and Receipt(s) to the Custodian, the Borrower certifies
to the Custodian that each Security Document listed in that Receipt is in form and substance
acceptable to HUD, as required by the Section 108 Contract. Except for Custodian's obligations
under this paragraph and paragraph 1 and 2 of this Agreement, the Custodian shall not otherwise
be under any duty to review, inspect, examine or certify the Security Documents; and without
limiting the foregoing, the Custodian shall be entitled to assume the genuineness of each such
document and the genuineness and due authority of any signatures appearing thereon, and shall
be entitled to assume that each such document is what it purports to be. The Custodian shall
have no liability for or obligation with respect to, and shall not be construed or obliged to make
any representation or warranty as to: (i) the validity, sufficiency, marketability, genuineness,
value, contents or enforceability of any Security Document; (ii) the validity, adequacy or
perfection of any lien upon or security interest purported to be evidenced or created thereby; or
(iii) to determine that the contents of any Security Document are appropriate for the represented
purpose or that any Security Document has actually been recorded or filed, as maybe applicable,
or that any Security Document is other than what it purports on its face to be.
3. The Custodian shall segregate and maintain continuous custody and control of all
Security Documents on behalf of HUD until the Section 108 Guaranteed Note is paid in full. The
Custodian shall hold the Security Documents in secure and fireproof facilities in accordance with
customary standards for such storage. The Custodian shall only rely on information pertaining to
the payment of the Section 108 Guaranteed Note that is received from or confirmed by the Director
of the Financial Management Division of HUD in Washington, DC ("FMD Director"), or another
HUD official as may be authorized by HUD in writing ("Other HUD Designee").
4. At any reasonable time, the Custodian shall make all Security Documents available
for examination and audit by representative of the Borrower or HUD.
5. (A) Upon notification to the Custodian by the FMD Director or Other HUD
Designee that a default has occurred under the Section 108 Contract, the Custodian shall comply
with any request HUD shall make for the delivery to HUD of all Security Documents, upon which
notification the Custodian may conclusively rely without inquiry, investigation or notice to
Borrower and within five business days of the Custodian's receipt of any such request by HUD,
shall send the Security Documents via courier service to the address identified in paragraph 6 and
contemporaneously provide HUD with the tracking information for the package containing the
Security Documents.
(B) If, following HUD's notification to Custodian of Borrower's default under
the Section 108 Contract, HUD elects to assume or transfer the duties and obligations of the
Borrower and elects to continue the custodial relationship, the Custodian agrees to continue its
obligations herein for HUD for a reasonable period, not to exceed 90 days, on the same terms and
conditions as set forth in this agreement until it receives instructions for disposition of the Security
Documents from the FMD Director or Other HUD Designee, provided, however, that in no event
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shall HUD be obligated to pay compensation or a fee for the holding or release of any Security
Documents during such reasonable period. If, however, HUD elects to terminate this agreement,
Custodian shall comply with the provisions of this election by HUD.
6. Except for termination or cancellation of this Agreement pursuant to paragraph 5, if
during the term of the Section 108 Guaranteed Note the Custodian's duties under this Agreement are
discharged or this Agreement is terminated or cancelled, Custodian may release Security
Documents to Borrower or to a successor custodian designated in writing by HUD upon
presentation by the Borrower of written approval of the FMD Director or Other HUD Designee
for the release of Security Documents to the Borrower. Provided, however, if no written
approval is presented, the Custodian shall return to all Security Documents to HUD within 5
business days at the following address:
Attention: Paul Webster, Director
Financial Management Division
U.S. Department of Housing and Urban Development
451 7t' Street SW — Room 7180
Washington, DC 20410
7. Borrower shall pay consideration for services to be performed by the Custodian
under this agreement shall be as set forth in Exhibit A hereto.
8. This Agreement confers rights and remedies upon HUD, and HUD shall be an
intended third -party beneficiary of this Agreement. The parties may not amend or terminate this
Agreement without the prior written consent of HUD provided, however, that the Custodian may
at any time resign under this Agreement by giving not less than sixty (60) days advance written
notice thereof to the Borrower and HUD. Prior to the effective date of the resignation, the
Borrower shall give written instruction to the Custodian designating a successor Custodian, if
applicable.
9. The Custodian shall be entitled to rely on any written instructions or certifications
delivered to the Custodian by the Borrower or HUD pursuant to this Agreement, in each case
without any independent verification or investigation of the matters set forth therein.
10. Custodian shall not be liable to anyone for anything which it may do or refrain
from doing in connection with this agreement, unless such action constitutes negligence in
accordance with customary standards for document storage, gross negligence, willful misconduct,
or bad faith on its part.
11. To the extent permitted by applicable law, the Borrower shall indemnify the
Custodian and any director, officer, agent or employee of the Custodian from all liability,
obligations, losses, claims (whether asserted by the Borrower, HUD or any other person or
entity), damages, actions, suits, proceedings, costs and expenses, including reasonable attorneys'
fees, arising out of, connected with, or resulting, directly or indirectly, from the execution,
delivery and performance of this Agreement, including with respect to the Custodian's
enforcement of the Borrower's obligations to the Custodian under this Agreement.
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12. The Custodian shall be without liability to the Borrower for any damage or loss
resulting from or caused by events or circumstances beyond the Custodian's reasonable control
including nationalization, expropriation, currency restrictions, the interruption, disruption or
suspension of the normal procedures and practices of any securities market, power, mechanical,
communications or other technological failures or interruptions, computer viruses or the like,
fires, floods, earthquakes or other natural disasters, epidemic, civil and military disturbance, acts
of war or terrorism, riots, revolution, acts of God, work stoppages, strikes, national disasters of
any kind, or other similar events or acts; errors by any party in its instructions to the Custodian;
or applicable law, regulation or orders.
13. This Agreement may be executed in any number of counterparts and all
counterparts taken together shall constitute one and the same instrument. The exchange of
copies of this Agreement and of signature pages by facsimile transmission or pdf shall constitute
effective execution and delivery of this Agreement as to the parties and may be used in lieu of
the original Agreement for all purposes. Signatures of the parties transmitted by facsimile or pdf
shall be deemed to be their original signatures for all purposes.
14. The terms of this Agreement are hereby declared to be severable, such that if any
term hereof is determined to be invalid or unenforceable, such determination shall not affect the
remaining terms.
15. The covenants and agreements set forth herein shall be binding upon and inure to
the benefit of each of the parties and their respective successors and permitted assigns. No party
shall be permitted to assign their rights under this Agreement without the written consent of the
parties and the FMD Director or Other HUD Designee, except that any corporation or association
into which the Custodian may be merged or converted or with which it may be consolidated, or
any corporation or association resulting from any merger, conversion or consolidation to which
the Custodian shall be a party, or any corporation or association to which the Custodian transfers
all or substantially all of its corporate trust business, shall be the successor of the Custodian
hereunder, and shall succeed to all of the rights, powers and duties of the Custodian hereunder,
without the execution or filing of any paper or any further act on the part of any of the parties
hereto.
16. This Agreement constitutes the complete and exclusive agreement of the parties
with regard to the matters addressed herein and supersedes and terminates as of the date hereof,
all prior agreements, agreements or understandings, oral or written between the parties to this
Agreement relating to such matters.
[Remainder of Page Intentionally Left Blank — Signature Page Follows]
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THIS AGREEMENT is hereby executed on behalf of the parties as follows:
Borrower: City of Pasco
By:
re)
Name: David Zabell
Title: City Manager
Date: C' 112 I ,Io "1'0
Custodian: S.ank N ti `nal Association
By:
(Signature)
Name:
Title:ss�szr V•cc..•c�-�
Date:
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APPOINTMENT OF AUTHORIZED CALLBACK REPRESENTATIVE(S)
I, _Paul D. Webster , a duly acting Director, Financial Management Division
(Name of Authorizing Official) (Title)
U.S. Department of Housing and Urban Development, a federal agency, do hereby certify that
the following have been appointed as Authorized Callback Representative(s) ONLY, at the date
hereof, and are authorized to confirm on behalf of the above U.S. Department of Housing and
Urban Development in matters relating to: City of Pasco's B -18 -MC -53-0009 Section 108 loan.
I also certify that the phone numbers next to their names are accurate for such individuals.
Name
Title
Phone Number
Scott K. Laliberte
Assistant Director (Acting)
202-402-3956
Stephen D. Slade
Loan Management Team Lead
202-402-4651
Witness my signature on this 4th day of May, 2020.
PAUL V'�C TER fsignedi PAUL
Datet 2020,05 04 17.-43:20 -MOO'
EXHIBIT A
SCHEDULE OF FEES FOR CUSTODIAN SERVICES
[Mbank.
Schedule of Fees for Services as
Custodian
For
City of Pasco HUD 108 Custody Acct
CTS01010 Acceptance Fee - The acceptance fee includes the administrative review of documents, initial set- Amount
A up of the account, and other reasonably required services up to and including the closing. This is $250.00
a one-time, non-refundable fee, payable at closing. Does not include legal fees.
CTSO4050 Custodian - Annual fee for the standard custodian services associated with the administration of Amount
the account. Administration fees are payable in advance. $500.00
Direct Out of Pocket Expenses. Reimbursement of expenses associated with the performance of our duties, including but not limited to publications, legal
counsel's fees and expenses after the initial closing, travel expenses, and filing fees will be billed at cost.
Extraordinary Administration Services. Extraordinary Administration Services ("EAS") are duties, responsibilities or activifies not expected to be provided by
the trustee or agent at the outset of the transaction, not routine or customary, and/or not incurred in the ordinary course of business, and may require analysis or
interpretation. Billing for fees and expenses related to EAS is appropriate in instances where particular inquiries, events or developments are unexpected, even
if the possibility of such circumstances could have been identified at the inception of the transaction, or as changes in law, procedures, or the cost of doing
business demand. At our option, EAS may be charged on an hourly (time expended multiplied by current hourly rate), flat or special fee basis at such rates or in
such amounts in effect at the time of such services, which may be modified by us in our sole and reasonable discretion from time to time. In addition, all fees
and expenses incurred by the trustee or agent, in connection with the trustees or agent's EAS and ordinary administration services and including without
limitation the fees and expenses of legal counsel, financial advisors and other professionals, charges for wire transfers, checks, internal transfers and securities
transactions, travel expenses, communication costs, postage (including express mail and overnight delivery charges), copying charges and the like will be
payable, at cost, to the trustee or agent. EAS fees are due and payable in addition to annual or ordinary administration fees. Failure to pay for EAS owed to U.S.
Bank when due may result in interest being charged on amounts owed to U.S. Bank for extraordinary administration services fees and expenses at the
prevailing market rate.
General. Your obligation to pay under this Fee Schedule shall govern the matters described herein and shall not be superseded or modified by the terms of the
governing documents, and survive any termination of the transaction or governing documents and the resignation or removal of the trustee or agent. This Fee
Schedule shall be construed and interpreted in accordance with the laws of the state identified in the governing documents without giving effect to the conflict of
laws principles thereof. You agree to the sole and exclusive jurisdiction of the state and federal courts of the state identified in the governing documents over
any proceeding relating to or arising regarding the matters described herein. Payment of fees constitutes acceptance of the terms and conditions described
herein.
Account approval is subject to review and qualification. Fees are subject to change at our discretion and upon written notice. Fees paid in advance will not be
prorated. The fees set forth above and any subsequent modifications thereof are part of your agreement. Finalization of the transaction constitutes agreement
to the above fee schedule, including agreement to any subsequent changes upon proper written notice. In the event your transaction is not finalized, any
related out-of-pocket expenses will be billed to you directly. Absent your written instructions to sweep or otherwise invest, all sums in your account will remain
uninvested and no accrued interest or other compensation will be credited to the account. Payment of fees constitutes acceptance of the terms and conditions
set forth.
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT:
To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record
information that identifies each person who opens an account.
For a non -individual person such as a business entity, a charity, a Trust or other legal entity we will ask for documentation to verify its formation and existence
as a legal entity. We may also ask to see financial statements, licenses, identification and authorization documents from individuals claiming authority to
represent the entity or other relevant documentation.
Date: 04/28/2020 U.S. Bank Personal