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1293335-1 1 <br />LOAN AGREEMENT BETWEEN THE <br />CITY OF SAN LEANDRO <br />AND THE <br />SAN LEANDRO UNIFIED SCHOOL DISTRICT <br /> <br /> <br />THIS LOAN AGREEMENT (this “Agreement”) is entered into effective as of <br />________________, 2013 (“Effective Date”) by and between the City of San <br />Leandro, a municipal corporation (the “City”) and the San Leandro Unified School <br />District, a political subdivision of the State of California (the “District”). <br /> <br />RECITALS <br /> <br /> A. The District is in the process of negotiating the purchase of a property <br />in the City that is owned by Girls, Inc., a non-profit corporation, that will be used by <br />the District to directly support the educational and administrative functions of the <br />District (the “Property”); and <br /> <br /> B. The City, pursuant to and in accordance with its Charter and State law, <br />may loan monies from its various funds for any public purpose; and <br /> <br /> C. The City Council found by Resolution No. ______ dated February 4, <br />2013 that it is a public purpose and within the City’s power and interest to loan the <br />District monies from its General Fund reserves to support the educational objectives <br />of the District related to its purchase of the Property. <br /> <br />NOW, THEREFORE, for good and valuable consideration, the sufficiency of <br />which is hereby acknowledged, the City and the District agree as follows: <br /> <br />1. Loan. The City agrees to loan to the District, and the District agrees to <br />borrow from and repay to City the sum of One million, two hundred fifty thousand <br />dollars ($1,250,000.00) (the “Loan”) upon the terms and conditions and for the <br />purposes set forth in this Agreement. The Loan shall be evidenced by a promissory <br />note (the “Note”) which shall be dated as of the Effective Date and executed by the <br />District in the form attached hereto as Exhibit A. The Term of this Agreement shall <br />be 15 years from the Effective Date until the principal, and all interest, if any, shall <br />have been paid in full, and all other obligations satisfied. <br /> <br />2. Interest Rate; Maturity Date; Prepayment. Interest shall accrue on the <br />outstanding principal balance of the Note commencing upon the date of disbursement <br />of the Loan proceeds and continuing as follows for the 15 years of the term until the <br />Note is paid in full: <br /> <br />Years 1 – 3: 1.5% simple interest per annum <br /> <br />Years 4 – 10: 3% simple interest per annum