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DRAFT Loan Agreement between City and SLUSD [v2, 011513] <br /> <br />1293335-1 <br /> <br /> <br /> <br />2 <br />Years 11 -15: 5% simple interest per annum <br /> <br />The entire outstanding principal balance of the Loan together with interest accrued <br />thereon and all other sums due under the Note shall be payable in accordance with <br />the amortization schedule attached hereto as Exhibit B. The District may prepay the <br />Loan in whole or in part at any time without penalty or premium. Partial <br />prepayments shall be applied first to accrued interest and then to principal. District <br />may transfer real property to City, the value of which, as determined by the City, <br />may be applied as a prepayment of loan principal. If such a transfer of real property <br />occurs, the amortization schedule in Exhibit B shall be re-adjusted by City to reflect <br />the application of the value of the real property received to the Loan principal. <br /> <br />3. Subordination. Notwithstanding any contrary provision hereof, the <br />Parties agree that the District’s obligation to repay the Loan shall not be subordinate <br />to any other instrument or indebtedness of the District, whether or not such <br />instrument or indebtedness is related to the District’s purchase of the Property. <br /> <br /> 4. Use of Loan Proceeds. The Loan proceeds shall be used solely for the <br />purchase of the Property. The Parties agree that the Property shall be used for the <br />District’s educational and administrative purposes during the Term of this <br />Agreement. In the event the Property ceases to be used by the District for <br />educational purposes, or is sold, transferred, or otherwise disposed of by the <br />District, all Loan principal and interest shall immediately come due and payable. <br />The Parties understand and agree that City shall bear no duty or have any <br />responsibility for the maintenance, upkeep, insurance or repair of the Property. <br /> <br />5. Parties Not Co-Venturers. Nothing in this Agreement is intended to or <br />shall establish the Parties as partners, co-venturers, or principal and agent with one <br />another. <br /> <br /> 6. Amendments. No amendment to or modification of this Agreement <br />shall be effective unless and until such amendment or modification is in writing, <br />properly approved in accordance with applicable law and procedures, and executed <br />by the Parties. <br /> <br /> 7. Non-Liability of Officials, Employees and Agents. No member, official, <br />employee or agent of the District shall be personally liable to City in the event of any <br />default or breach by the District, or for any amount of money which may become due <br />to City or its successor, or for any obligation of District under this Agreement. <br /> <br /> 8. No Third Party Beneficiaries. There shall be no third party beneficiaries <br />to this Agreement. <br />