Agmt 2017 CDBG-Housing Consortium of the East Bay (HCEB)

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ARTICLE I LOAN TERMS; USE AND DISBURSEMENT OF PROCEEDS 1.1 LOAN. City agrees to loan to Participant, and Participant agrees to borrow from City a sum of up to Ten Thousand Dollars ($10,000) (the "Loan") upon the terms and conditions and for the purposes set forth in this Agreement for construction of the Improvements which are approved by the City. The Loan shall be evidenced by the Note which shall be dated as of the Effective Date and executed by Participant substantially in the form attached hereto as Exhibit B. 1.2 REPAYMENT; INTEREST RATE; FORGIVENESS. 1.2.1 'LOAN TERM AND REPAYMENT. The Term of this Agreement shall be twenty (20) years. Provided that Participant is not in default under the Loan Documents, the City shall forgive one twentieth (1/20th) or Five Hundred Dollars ($500.00) of the outstanding principal loan balance annually on the anniversary of the Effective Date of the Agreement. On the 20th anniversary of the Effective Date, provided that no default or breach by Participant has occurred pursuant to Article IV, the entire outstanding principal and interest accrued on the Loan shall be forgiven. If Participant sells or transfers the Property or changes the use of the Property without written approval from the City, the Loan shall become due and payable upon sale. 1.2.2 [Reserved] 1.2.3 TIMELINE TO SPEND THE LOAN. Participant shall expend the entire Loan within twelve(12) months of the effective date of this Agreement. 1.2.4 INTEREST. Interest shall accrue on the principal balance of the Loan at a rate of three percent(3%)simple interest per annum. 1.3 PREPAYMENT. Participant may, without premium or penalty, at any time and from time to time, prepay all or any portion of the outstanding principal balance due under the Note. Any prepayment of principal must be accompanied by interest accrued but unpaid to the date of receipt of prepayment. Prepayments shall be applied first to any unpaid late charges and other costs and fees then due, then to accrued but unpaid interest and then to principal. 1.4 USE OF PROCEEDS, Participant shall use the proceeds of the Loan (the "Loan Proceeds") solely and exclusively to pay for costs related to the Improvements described in Exhibit D and in accordance to the budget and timeline specified in Exhibit D. 1.5 DISBURSEMENT OF PROCEEDS, Participant shall submit separate written requests for each disbursement of Loan funds with supporting evidence for all amounts requested (each a "Requisition"). Participant shall submit each Requisition to the Community Development Director, or her/his designee, stating the requisition or invoice number (e.g., Invoice #11) and purpose and amount of the requested disbursement. Participant shall attach copies of any documents supporting the Requisition, including estimates, bids, receipts, invoices, contracts, payment schedules, or evidence of Participant's payment of preconstruction and rehabilitation expenses required to fund the Improvements. The 2 Capital Improvement Loan Agreement-HCEB October 1,2017