Agenda - Council - 03/24/2015 - Laserfiche WebLink

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ARTICLE VII. LOAN NO. 1 Section 7.1 Loan No. 1. To assist Developer with the construction of the Housing Development Project, the HRA proposes to make a $1,420,000.00 loan to Borrower pursuant to the terms of the Loan Agreement and Note No. 1. The HRA proposes to fund Loan No. 1 with tax increments the City has collected from the City's Tax Increment District No. 1, which the City will make available to the HRA. Section 7.2 Loan Agreement, Note No. 1 and Corporate Guaranty. Contemporaneous with the HRA's conveyance of the Development Property to Developer: the HRA and Borrower must each execute the Loan Agreement and must each deliver an original, executed Loan Agreement to the other party; Borrower must execute Note No. 1 and deliver Note No. 1 to the HRA; and Borrower must cause the Corporate Guarantor to execute the Corporate Guaranty and deliver the Corporate Guaranty to the HRA. In the event of a conflict between the terms of Note No. 1 and the terms of this Development Agreement, the terms of Note No. 1 control. In the event of a conflict between the terms of this Agreement and the terms of the Loan Agreement, the terms of the Loan Agreement control. Section 7.3 Fee in Lieu of Interest and Default Interest Rate. Note No. 1 does not obligate Borrower to pay interest on the outstanding principal of Loan No. 1 provided Borrower is not in default in -the timely payment of any amounts due under Note No. 1. In lieu of non - default interest and as consideration for the extension of credit, the HRA will charge Borrower and Borrower agrees to pay a one-time fee of $120,000.00. As set forth in the Loan Agreement, the HRA will be deemed to have made a $120,000.00 "Advance," to itself from the available proceeds of Loan No. 1 in full payment of this fee contemporaneously with the first "Advance" of the proceeds of Loan No. 1 that the HRA makes pursuant to the terms of the Loan Agreement. If, at any time after the execution of the Loan Agreement, Borrower defaults in the timely payment of any amounts due under Note No. 1, the HRA gives Borrower "Written Notice" of the default, as provided for in the Loan Agreement, and Borrower does not cure the default within ten (10) days of the effective date of the HRA's notice, interest shall accrue on the outstanding principal balance of Note No. 1 from the date of the default through the date Borrower cures all defaults under Note No. 1 at the rate of twelve percent (12%) per annum. Section 7.4 Repayment Terms. Commencing on April 1, 2015 and continuing on each April 1 thereafter until April 1, 2025, Borrower must pay to the HRA, in certified or wire transferred funds and for application to the outstanding principal and interest, if any, due under Note No. 1, an amount equal to 20% of the Net Cash Flow for the immediately preceding calendar year. If, prior to April 1, 2025, Developer refinances a Project Loan, Borrower must make an additional payment to the HRA, for application to the outstanding principal due under Note No. 1, in an amount equal to 20% of the difference between the principal amount of the new Project Loan and the amount of the outstanding principal and accrued, unpaid interest under the Project Loan that is being refinanced. The preceding sentence applies each time Developer refinances a Project Loan. Notwithstanding anything else in this Section 7.4, if Developer refinances a Project Loan to obtain additional funds that are necessary to complete the initial construction of the Minimum Improvements, Borrower is not obligated to pay to the HRA 20% 13 2695614v16