R2002-108 ENDORSING THE SUBMISSION OF AN APPLICATION

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2. SECTION 108 PROCEEDS USE FOR ELIGIBLE ACTIVITIES The City will provide financial assistance in the following activity areas: A. Acquisition of exiting facilities and/or land for purposes of locating new jobs or relocating and expanding existing business in the identified project areas. B. Construction of new facilities and housing in the identified project areas. C. Rehabilitation of existing facilities and housing in the identified project areas. D. Capital Equipment. E. Working Capital F. Demolition and cost of disposition. G. Necessary and appropriate soft costs related to the above activities such as reasonable architectural fees, reasonable legal fees, cost of financing fees, financial consultants, and other eligible costs. 3. CREDIT ENHANCEMENT Under appropriate circumstances the City will utilize other private financing and/or non-HUD financing. It is anticipated that the Section 108 commitments will be drawn down on an interim lending basis during construction and ultimately rolled into a permanent longer term note upon completion of any construction or rehab. Each Section 108 project shall conform to HUD's then current securitization/collateral requirements. 4. TERMS OF ASSISTANCE AND CONDITION A. Section 108 assistance will be provided to sub recipients on the following basis: 1.) Section 108 assistance will be accompanied by an appropriate sub recipient contract adequately enforcing the HUD requirements placed on the grantee; 2.) Appropriate security and collateral will be secured by the sub recipient as well as the necessary insurance to protect the Section 108 Loan; 3.) For any assisted project in which the forecasted cash flow is not adequate to pay the Section 108 guaranteed notes, will require sufficient collateral and security in a form acceptable to HUD to provide coverage in the event that the Community Development Block Grant Proposed Section 108 Loan Application Page 4 0(/11/�2