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HomeMy WebLinkAboutReso 1984-11713 RESOLUTION NO. 11713 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING AGREEMENT WITH BANK OF AMERICA FOR HOUSING REHABILITATION AND COMMERCIAL REHABILITATION LENDING SERVICES The City Council of the City of Chula Vista does hereby resolve as follows: WHEREAS, the City has undertaken Housing Rehabilitation and Commercial Rehabilitation Programs to encourage and assist private property improvement; and, WHEREAS, THE City Council appropriates Community Development Block Grant funds and the Redevelopment Agency of the City of Chula Vista appropriates Agency funds in various amounts from time to time to under- take such activities; and, WHEREAS, the City wishes to use such funds to generate investment of lending industry funds in the City's property rehabili- tation efforts; and, WHEREAS, the provision of said services will involve com- mitment of Bank of America funds to the City's Property Rehabilitation efforts; and, WHEREAS, the commitment of said funds will be generated by deposit of City and Agency Property Improvement Funds with Bank of Amercia; and, WHEREAS, an agreement with Bank of America for such funds entitled Property Rehabilitation Loan Agreement Comprehensive Form is attached hereto and incorporated herein as though fully set forth. NOW, THEREFORE, BE IT RESOLVED that the Property Rehabili- tationLoanAgreement Comprehensive Form is hereby approved and the Mayor is authorized to execute the agreement for and on behalf of the City of Chula Vista. Presented b~ Approved as to form by iJ 'A -f~ a G. De rochers, Community Development Director \ ',--- / / ( '-,. ..',/ 11 Harron, City Attorney Thomas J. LA VISTA, CALIFORNIA, this 84 , by ADOPTED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF 24th day of July the following vote, to-wit: McCandliss, Scott, Cox, Moore Councilmen S: ES: Councilmen None iTAIN: COlrlcilmen None ENT: Councilmen Malcolm L I!~ May~e City of Chura Vista .EST City TE OF CALIFORNIA ) INTY OF SAN DIEGO ) ss. , OF CHULA VISTA ) I, JENNIE M. FULASZ, CMC, CITY CLERK of the City of Chula Vista, California, HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 11713 ,and that the same has not been amended or repealed. ED (seal) City Clerk .660 PROPERTY REHABILITATION LOAN AGREEMENT COMPREHENSIVE FORM THIS AGREEMENT is made by the CITY OF CHULA VISTA, a municipal corporation in the State of California (herein called "Authority"), and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking association (herein called "Bank"). RECITALS A. Authority has authorized a Housing Preservation Program, a Commercial Property Rehabilitation Program and a Personal Property (Mobile Home) Program as part of an adopted Community Development Block Grant Program (as may be amended and modified from time to time) hereinafter collectively call ed "Program". B. As part of Authority's implementation of Program, Authority has requested Bank to make below-market interest rate property rehabilitation loans ("Loans" or "Program Loans") to certain owners/tenants of single and multi-unit residential and commercial real property and residential personal property (Mobile Homes) within Authority and approved by Authority as recipients of Loans ("Applicants"). The purpose of the Loans would be the rehabilitation of said real and personal property in accordance with Program. In addition, Authority has requested a choice of several types of Loans to Applicants. }' , / ///:-::' c .i ./, " -1- C. To support these objectives, and based on an initial deposit of Communi ty Development Block Grant funds, Bank is wi 11 i ng to provi de Authority and Applicants with Collateralized Loans (Part Three), Personal Property (Mobile Home) Collateralized Loans (Part Four), Deferred Payment Loans (Part Five), and other services at rates and terms not available to the general public or to Authority independent of this Agreement. NOW, THEREFORE, for and in consideration of the foregoing and the mutual agreements made therein, and for other good and valuable consideration, Authori ty and Bank agree as foll ows: PART ONE DEPOSIT OF COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS 1. Authority shall deposit up to $200,000.00 of Community Development Block Grant Rehabilitation funds available to Authority under the Housing and Community Development Acts of 1974 and 1977, as amended, as part of this Agreement. 2. Authority's deposits of Community Development Block Grant funds may be made in any of the following forms: (a) A deposit to the Warehouse Account, the funds in which are unallocated to Loans. (b) A deposit to Collateralized Loan Account(s) which are noninterest-bearing savings accounts which subsidize Loans and are pledged as Loan collateral. -2- \\\ \'" -?-- (cl The purchase from Bank of time certificate(s) of deposit from which all proceeds are allocated to future Program Loans. Bank will pay, at Authority's election, the highest interest rate permitted by law on all accounts described above. If legal interest rate limitations are removed, Bank will pay its highest rate offered to the public. 3. Authority relinquishes the use of and control over accounts described in paragraph 2(b). This account will be used only for the Loan purposes described in this Agreement. 4. Authority retains full accessibility to all deposits which are unallocated to existing Program Loans. 5. Authority agrees all interest earnings will be paid to the Warehouse Account and will become immediately available for the subsidy of Loans. Authority is aware that the terms and conditions of the Agreement are subject to the provisions governing lump-sum drawdowns for property rehabilitation, Section 570.513 of the HUO Regulations on Community Development Block Grants, 24 CFR Part 570. Authority will comply with that section when it deposits or expends HUD lump-sum drawdowns. When Authority makes such deposits or expenditures, Bank need not attempt to verify that that section permits the deposit or expenditure. -3- ~-\\\\) PART TWO APPLICATION PROCEOURES 6. (al At the request of Authority, Bank, through its Chula Vista Main Office, shall consider making loans to qualified Applicants directed to Bank by Authority. Bank shall notify the respective Applicant(s) in writing of any such request it receives from Authority. The notification shall contain the following statement: "The City of Chula Vista has requested the Chul a Vi sta ~1ai n Offi ce of Bank of Ameri ca Nati ona 1 Trust and Savi ngs Association, 295 E. Street, Chula Vista, California 92010, to consider making a specific extension of credit to you." (b) A qualified Applicant shall be identified by Authority or its agents, using Authority's established standards, which must consider, without limitation: (i) Applicant is "the owner of record" of the property subject to rehabilitation. (ii) Authority has verifiable income(s) which can be used to repay the proposed Loan. (iii) Authority has determined that the proposed Loan, given Program options available, will best serve the rehabilitation needs of Applicant and the Program objectives. (cl In addition, each commercial improvement/rehabilitation Loan Applicant, if a lessee, has a lease which, with options, extends at least six (6) months beyond the maturity of the proposed Loan. 7. Authority shall furnish to Bank, with respect to each loan application: -4- ?.-\\"'" (a) an introductory letter stating that Authority desires Bank to consider making a Loan to Applicant; (b) a breakdown of the costs involved in the rehabilitation work to he performed on Applicant's real property; (c) a description of the work; (d) an estimate of the value of the real property offered as security for the Loan; (e) a copy of any contractor bid proposed to or accepted by Applicant; (f) a statement including the name of the contractor who will perform the rehabilitation work, and a statement that Authority has satisfied itself with respect to the competence and reliability of the particular contractor; and (g) for each commercial improvement/rehabilitation Loan, Bank shall require from Applicant: (1) 2-year business income statements supported by IRS income tax filings; (2) a copy of the existing lease, if Applicant is a property tenant; (3) Applicant's personal financial statement; (4) A policy of Creditor Life Insurance, in a form acceptable to Bank. The policy must be maintained while the Loan remains outstanding, in an amount at least equal to the amount outstanding under the Loan to Applicant, with Bank assigned as policy owner. Upon Authority's request, said insurance shall he prepaid from Loan proceeds and said amount added to the principal amount of the Loan. At Bank's request, each Appplicant -5- ~~ shall also be required to maintain a standard policy of hazard insurance covering the real property upon which the rehabilitation work is to be performed in effect while any part of the Loan remains outstanding, with Bank named as beneficiary. In the case of defaulted Loans, Authority agrees to guarantee unpaid premiums in accordance with the provisions of paragraph 13 below. (h) Release form. 8. Bank shall perform its customary credit evaluation with respect to the Applicant, render its judgement with respect to the credit worthiness of the Applicant, and recommend appropriate Loan terms. 9. Upon completion of its credit evaluation, Bank shall furnish to Authority a recommendation to proceed with the Loan or not, including: (a) a recommendation as to use of either a Collateralized, or Deferred Payment Loan, or some combination thereof; and (b) an indication which of the following Loans (for which Bank assumes part ot the credit risk, as indicated parenthetically below) Bank is willing to make to Applicant: (1) for residential property improvement Loans: (i) a 5% Collateralized Loan (22% credit risk); (ii) an 8.25% Collateralized Loan (50% credit risk). (2) for commercial property improvement Loans, a 10.00% Collateralized Loan (60% credit risk). 10. After having determined the exact nature and scope of the rehabilitation work to be performed on Applicant's real or personal property, Authority may request Bank to grant Applicant a Loan, which either must be from among those designated by Bank pursuant to paragraph 9(b) above or must -6- ~-\\\\) he a Loan pursuant to paragraph 11(a) (100% collateralized) or paragraph 19 (Personal Property (Mobile Home) Collateralized Loans), or paragraph 28 (Deferred Payment Loan). PART THREE COLLATERALIZED LOANS 11. Each Collateralized Loan shall be supported by a deposit as described below, made by Authority to a Collateralized Loan Account. These accounts shall at all times be at least equal to: (a) 100% of unpaid principal for each 5.00% Loan for which Bank ~as not designated the Applicant (Pursuant to paragraph 9(b)(1) as a party to whom Bank is willing to make a (partially) Collateralized Loan. Bank agrees to pay 1.8% interest annually on 100% collateral required for all 5.00% Loan; (h) 78% of unpaid principal for each 5.00% Rehabilitation Loan; (c) 50% of unpaid principal for each 8.25% Residential Rehabilitation Loan; (d) 40% of unpaid principal for each 10.00% Commercial Rehabilitation Loan; plus, in each case, 100% of accrued unpaid interest. Authority ~ereby assigns the Collateralized Loan Account to secure the Collateralized Loans. 12. (a) Unless Authority requests one note only, each Collateralized Loan shall he evidenced by two notes, effective in succession, as provided herein. (h) The note first effective shall be a short-term commercial note, the term of which shall coincide approximately with the rehabilitation period (although all references herein to the short-term commercial note are singular, a Loan could include more than one short-term commercial note). The -7- ~-\\\\) term of anyone short-term commercial note may not exceed ninety (90) days, although the note may be extended, renewed, or refinanced. The Loan proceeds thereof shall be disbursed by Bank in a number of draws, each to follow completion of an applicable state of construction, as certified to Bank by Authority. Interest shall accrue only on the disbursed portion of the Loan. (c) Promptly after Bank's disbursement of the final draw under the short-term commercial note, that note shall be refinanced by an installment note, as provided for at subparagraph (d) below or, alternatively, as provided in Part Five (Deferred Payment Loans). At the time the short-term commercial note is refinanced by the installment note, Applicant may either pay Bank the accrued interest on the short-term commercial note or may have it added to the principal of the installment note. (d) The term of the installment note shall be determined by the Applicant's debt-to-income ratio for the Loan in question but: (i) may not exceed 15 years for residential rehabilitation; (ii) may not exceed 10 years for commercial rehabilitation unless the proposed Loan is over $75,000 and is to the property owner in which case the term may not exceed 15 years. The installment note shall be amortized in equal monthly installments over its term. (e) Bank reserves the rigbt to require a contractor funding control service or construction progress inspections by the Bank's Appraisal Department on all multi-family properties. In either case, construction inspection expense sball be paid by the Applicant. 13. With respect to Collateralized Loans: (a) On both the short-term commercial note and the installment note, interest and other finance charges shall be such as to bear interest at an annual rate of 5.00%, or 8.25%, or 10.00% calculated on a simple interest basis. -8- R-\\\\) (b) The loan shall be documented using Bank's standard forms. (cl Both the short-term commercial note and the installment note shall, at Bank's or Authority's option, be secured by a deed of trust covering the real property that is subject of the rehabilitation for which the proceeds of the Loan are to be used. 14. Authority shall make a relevant deposit to the Collateralized Loan Account in the percentage of Loan amount provided for in paragraph 11, when the commercial note and deed of trust are signed by Applicant and when interest on a short-term commercial note becomes added to the principal of a subsequent installment note. At the end of each calendar month ending 180 days after Authority's first deposit hereunder, Bank shall remit to Authority the amount by which the Collateralized Loan Account exceeds the paragraph 11 percentages of the unpaid balances of Collateralized Loans. Funds that Bank thus remits to Authority shall be deemed funds that Authority deposited at least 180 days before. 15. If a Collateralized Loan remains in default for a continuous period of ninety (90l days on account of nonpayment of any sum of money due pursuant to the terms thereof or of any instrument or document related thereto, Bank may withdraw from the Collateralized Loan Account, and pay to itself, an amount equal to the then outstanding principal balance of the Loan multiplied by the same percentage as the percentage of the Loan amount that was deposited to the Collateralized Loan Account pursuant to paragraph 11, plus 100% of accrued unpaid interest on the Loan and insurance premiums, if any, through the 90th day of default. Bank shall have no recourse against Authority or the Collateralized Loan Account for any amounts in excess of those permitted under this paragraph. During any ninety (90) day default period, Bank shall perform its customary collection procedures with respect to the Loan. -9- \~-\\'\) 16. After a withdrawal from the Collateralized Loan Account under paragraph 15, in the case of a Loan for which the deposit to the Collateralized Loan Account under paragraph 11 was less than 100% of the loan amount: (al Bank need not assign the deed of trust to Authority upon completion of the withdrawal but may, for its own account, exercise rights under the deed of trust to recover the remaining outstanding unpaid principal of the Loan plus accrued unpaid interest thereon after the 90th day of default. (h) At its election, Bank may assign to Authority such rights as may be necessary for Authority to attempt to recoup any funds withdrawn from the Collateralized Loan Account in connection with any Loan default. Authority agrees to recoup funds, as much as possible, for the benefit of Bank as well as itself. Funds recovered shall be credited as follows: (1) to withdrawals from the Collateralized Loan Account; (2) to the costs of recovery; (3) to Bank's Loan charge-off. (cl If Bank subsequently recovers funds with respect to a defaulted Loan (as, for example, but without limitation, if a voluntary sale of the property takes place), Bank shall, after deducting the previously unreimbursed percentage of Loan loss to which Bank is entitled, plus Bank's cost of recovery, return and pay over to Authority all amounts in excess thereof. 17. After a withdrawal from the Collateralized Loan Account under paragraph 15 above, in the case of a Loan for which the deposit to the Collateralized Loan Account under paragraph 11 was 100% of the Loan amount, Bank shall assign the Loan to Authority, the assignment to be accomplished by: -10- ~_\\\\3 (a) the due endorsement by Bank to Authority of the promissory note evidencing the loan, without recourse or warranty; and (b) the delivery of the promissory note and the assignment and delivery of the deed of trust. 18. Collateralized Loans, as described in paragraphs 11 through 15, must have an average original Loan amount of $10,000. Authority's Collateralized Loans will be analyzed every 180 days from contract approval. If average $10,000 Loan amounts are not maintained, Bank may: (a) increase borrower interest rates for new Loans; (b) increase collateral requirements for new Loans; or (c) assess an origination fee for new Loans. These options are negotiated and mutually accepted by Bank and Authority. 19. The Bank's total commitment for loans to be made under this program is limited to $1,500,000. In addition, Bank agrees to make up to $2,000,000 in loans to qualified applicants using the various Small Business Administration programs which relate to, and are supportive of the Authority's goals and objectives in which the Bank is participating at the time of application. These include, primarily, the SBA Section 503 program provided by the Local Development Corporation of San Diego County up to any amount limitations on each transaction; the regular,SBA 7 (a) program up to $550,000 per loan and Bank of America's Preferred Lender~ Program (PLP) up to $650,000 per loan or, any combination of these programs which, in the Bank's judgement are appropriate and best suit the requirements of the applicant, the Authority and the Bank. -11- ~\\\\~ PART FOUR PERSONAL PROPERTY (MOBILE HOME) COLLATERALIZED LOANS 20. Each Loan shall be a Collateralized Loan and shall be supported by a noninterest-bearing deposit made by Authority to a Collateralized Loan Account. The account shall, at all times, be equal to at least: A. 100% of unpaid principal for each 5.00% Loan for which Bank has not designated the Applicant as a party to whom Bank is willing to make a (partially) Collateralized Loan; B. 55% of unpaid principal for each 10.00% Loan. Authority hereby assigns the Collateralized Loan Accounts to secure the Collateralized Loans. 21. The term of the installment note shall be determined by Bank for the Loan in question, but may not exceed fifteen (15) years, and the installment note shall be amortized in equal monthly installments over its term. Interest will be calculated on a simple interest basis for each installment note. If Bank is unable to establish a market value, Bank, at its election, may charge an appraisal fee. 22. With respect to personal property Collateralized Loans: (a) The installment note, interest and other finance charges shall be such as to bear interest at an annual rate of 5.00% or 10.00% which shall be calculated on a simple interest basis. (b) The Loan shall be documented using Bank's standard forms. (c) The installment note may, at Bank's option, be secured by an interest covering the personal property (mobile home) that is the sUbject of the rehabilitation for which the proceeds of the Loan are to be used. -12- ~_\\\\3 (1) Bank must receive a "State of California, Department of Housing and Community Development Certificate of Title, Mobile Home" for all 10.00% Loans; the Certificate must show the Bank as the first lien holder of record. (2) Bank must receive a "State of California, Department of Housing and Community Development Certificate of Title, Mobile Home" or a California Department of Motor Vehicle ownership certificate (pink slip) for all 5.00% Loans. At Authority's request, 5.00% Loans may be made without security. (d) Personal Property Collateralized Loans shall not exceed $10,000 (Ten Thousand and no/100 Dollars). 23. Authority shall make a relevant deposit to the Collateralized Loan Accounts in the percentage of Loan amount provided for at paragraph 19 when the installment note and security instrument are signed by Applicant. At the end of each calendar month ending 180 days after Authority's first deposit hereunder, Bank shall pay to the Warehouse Account the amount by which the Collateralized Loan Account exceeds the paragraph 19 percentage of the unpaid balances of Co11teralized Loans. 24. If a Collateralized Loan remains in default for a continuous period of ninety (90) days on account of nonpayment of any sum of money due pursuant to the terms thereof or of any instrument or document related thereto, Bank may withdraw from the, Collateralized Loan Account and pay to itself, an amount equal to the then outstanding principal balance of the Loan, multiplied by the same percentage as the percentage of the loan amount that was deposited to the Collateralized Loan Account pursuant to paragraph 19 plus: (a) 100% of accrued unpaid interest on the Loan through the 90th day of default; and -13- ~_\\1\~ (b) 100% of any costs paid by Bank, at its election, in an effort to protect the value of personal property securing a Program Loan; Bank shall have no recourse against Authority or the Collateralized Loan Account for any amounts in excess of those permitted under this paragraph. During any ninety (90) day default period, Bank shall perform its customary collection procedure with respect to the Loan. 25. After a withdrawal from the Collateralized Loan Account under paragraph 24 above, in the case of a Loan for which the deposit to the Collateralized Loan was less than 100% of the Loan amount: (a) Bank need not assign the Certificate of Title, Mobile Home to Authority upon completeion of the withdrawal but may, for its own account, exercise rights under the Certificate of Title, Mobile Home to recover the outstanding and unpaid principal of the Loan plus accrued unpaid interest and expenses thereon after the 90th day of default. (b) At its election, Bank may assign to Authority such rights as may be necessary for Authority to attempt to recoup any funds withdrawn from the Collateralized Loan Account in connection with any Loan default. Authority agrees to recoup funds, as much as possible, for the benefit of Bank as well as itself. Funds recovered shall be credited as follows: (1) to withdrawals from the Collateralized Loan Account; (2) to the costs of recovery; (3) to Bank's Loan Charge-off. (c) If Bank subsequently recovers funds with respect to a defaulted Loan (as, for example, but without limitation, if a VOluntary sale of the property takes place), Bank shall, after deducting the previously unreimbursed percentage of Loan loss to which Bank is entitled, plus Bank's cost of recovery, pay to the Warehouse Account all amounts in excess thereof. -14- ~-\\\\) 26. After a withdrawal from the Collateralized Loan Account under paragraph 24 above, when a Loan where the deposit to the Collateralized Loan Account was 100% of the Loan amount, Bank shall assign the Loan, if possible, to Authority, the assignment to be accomplished by: (1) the due endorsement by Bank to Authority of the promissory note evidencing the loan, without recourse or warranty; and (2) the delivery of the promissory note and the assignment and delivery of the ownership certificate or Certificate of Title, Mobile Home. 27. Bank and Authority recognize the major changes affecting residential personal property caused by recent changes to the health and safety code, and by recent promulgation of mobile home regulations by the State of California. Bank therefore makes no warranties, expressed or implied, about the effectiveness or value of security agreements or documents covering residential personal property. 28. Collateralized Loans, as described in Part Four are to be included in the average Loan size requirements described in paragraph 18. PART FIVE DEFERRED PAYMENT LOANS 29. In the event Authority requests Bank to make a Loan, the terms of which are other than as provided in Parts Three and Four above, Bank shall comply with Authority's request. In that case, after Bank has obtained Applicant's note on terms Authority has requested for the Loan, Bank shall, promptly after completion of the respective rehabilitation work, assign the Loan to Authority according to the same procedures, and for the same price, as would be applicable under paragraphS 15 through 17 (Part Three) and paragraphs 23 through 26 (Part Four) in the case of the assignment following default of a Collateralized Loan for which the deposit to the Collateralized -15- ~_\\,\3 Loan Account under paragraphs 11 and 19 was 100%. Promptly after the assignment, unless previously paid by Authority, Applicant shall pay to Bank a fee to cover its internal administrative and out-of-pocket expenses, as specified by Bank, but in no event less than THIRTY-SEVEN AND 50/100 DOLLARS ($37.50) nor more than SEVENTY-FIVE DOLLARS ($75.00) for each Loan so made. Such fee shall be at Applicant's sole expense if not recovered from Authority. 30. Prior to the making of the first Deferred Payment Loan, Authority shall furnish Bank an opinion of its legal counsel: (a) stating that Authority has establised rates and terms for its Deferred Payment Loan Program note; (b) designating whether any Deferred Payment Loan fee is a "charge to be financed" or a "prepaid finance charge" under Regulation Z; and (c) that Authority has delivered this information and note to Bank's Chula Vista Main Office. PART SIX GENERAL PROVISIONS 31. On Authority's request, Bank shall, for its customary fees therefore, accept for collection purposes, pursuant to Bank's then current installment collection procedures, a Program Loan that has been transferred to Author; ty. 32. On Authority's request, Bank shall, for its customary fees therefore, provide foreclosure services with respect to a defaulted Program Loan that has been transferred to Authority, in which case Bank shall be substituted for Continental Auxiliary Company/Authority as trustee under applicable deed of trust. -16- R-\\l\"> 33. (a) The term of this Agreement shall mature on July 31, 1985. This Agreement may be terminated or amended by either of the parties hereto at six (6) month intervals from November 30, 1984, provided written notice of intent is given to the other party at least fifteen (15) days prior to the termination date. (b) Any termination of the Agreement shall not affect Program Loans outstanding at the time of termination. (c) At termination, Bank shall retain the Collateralized Loan Account and shall remit monthly to Authority the amount by which the Collateralized Loan Account exceeds the paragraphs 11 and 19 percentages of the unpaid balances of Collateralized Loans. 34. Bank covenants and agrees that nothing in this Agreement or any agreement made pursuant hereto shall be deemed or construed by Bank to make Authority a surety or guarantor of any Loan, and that Bank's rights with respect to a Collateralized Loan shall be limited to those set forth at paragraphs 14 through 17 and 23 through 26 hereof. 35. Authority and Bank shall comply with all applicable statutes and regulations, including without limitation, where applicable, the Federal Truth in Lending Act and Regulation Z thereto, the Consumer Credit Reporting Act, and the Equal Credit Opportunity Act and Regulation B thereto. 36. Except as specifically required by this Agreement, Authority waives any right it may have to require Bank to: (a) proceed against any Applicant or other person; (b) proceed against or exhaust any collateral for the relevant Loan; or -17- ~_\\1\3 (cl pursue any other remedy in Bank's power; and waives any defense arising by reason of any disability or other defense of Applicant or any other person, or by reason of the cessation from any cause whatsoever, other than full payment, of the liability of an Applicant or any other person. 37. Bank and Authority acknowledge the "Special Purpose" nature of the Program and Program Loans. To serve this "Special Purpose", a Loan shall be considered in default after the date of a transfer of the deed of trust of property which, according to the provisions of the note, make the entire principal and interest of the note due and payable, regardless of Bank's ability or inability to enforce those provisions of the note. 38. Any communications between the parties hereto may be given by mailing the same, postage prepaid, to Bank at its Chula Vista Main Office, 295 E. Main Street, Chu1a Vista, California 92010, and to Authority at its Office of Community Development, City of Chu1a Vista, City Hall, 276 Fourth Avenue, Chu1a Vista, California 92010, or to such other addresses as either party may in writing hereafter indicate. 39. This Agreement and any agreement, document, or instrument attached hereto or referred to herein integrate all terms and conditions mentioned herein or incidental hereto, and supersede all oral negotiations and prior writings in respect to the subject matter thereof. In the event of any conflict between the terms, conditions, and provisions of this Agreement and any such agreement, document, or instrument, the terms, conditions, and provisions shall prevail. 40. Authority shall indemnify and hold harmless Bank against all claims and damages, alleged or otherwise, of whatsoever nature arising out of or in any way connected with the acts or omissions of any contractor -18- ?-_\\\\3 performing rehabilitation work in connection with this Agreement; provided, however, that Authority's obligations under this paragraph shall not extend to negligent or willful acts or omissions by Bank. All contractors shall operate as independent contractors and nothing herein is intended to affect such independent contractor status. 41. Bank may, at its option, decline to make additional Loans from and after the date when the principal balance of all Loans outstanding has exceeded ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000.00l. 42. This Agreement may be executed in as many counterparts as may be deemed convenient, each of which, when executed, shall be deemed an original. 43. The operating aspects of this Agreement, including but not limited to target area boundaries, may be altered from time to time through a letter of understanding, accepted mutually by Authority's Director of Community Development and Bank's Community Development Department, 555 South Flower Street, Los Angeles, California 90071. 44. Bank recognizes authorities revitalization activities beyond the scope of this Agreement. On a case by case basis bank will, at authorities request, review and consider Loan applications that do not otherwise conform to this agreement. All rates and terms will be established by the Bank. The Bank's credit judgment on these special considerations will be final. -19- R-\\\13 IN WITNESS WHEREOF, this Agreement is executed by Authority acting by and through its City Council, pursuant to Resolution No. 11713 authorizing such execution, and by Bank. Dated this 25th day of July /" I C,. . Title Mayor City of Chula Vista APPROVED AS TO FORM , /' "'fl. J. . (~ Ci ty Attorney (,~,//- / Attached is a true and correct copy of the original Resolution: ~'1/Jt-C.G 0J d/.p!L.-a.o/.~ Ci~erk ,:1 -20- ?-1\l13 , 1984 BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION Approved: BYL;i~:(c;r .~~~ / Title Ass't. Vice President Community Development Dept