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Page 2 <br /> <br />CDBG LOAN AGREEMENT <br />BETWEEN THE CITY OF SAN LEANDRO AND <br />BUILDING FUTURES FOR WOMEN AND CHILDREN <br /> <br /> NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby <br />acknowledged, the Parties hereto agree as follows: <br /> <br />ARTICLE I <br />LOAN TERMS; USE AND DISBURSEMENT OF PROCEEDS <br /> <br /> 1.1 LOAN. City agrees to loan to Participant, and Participant agrees to borrow from City a sum <br />of up to One Hundred Forty Three Thousand Seven Hundred Twenty Five Dollars ($143,725.00) (the “CDBG Loan”) upon the terms and conditions and for the purposes set forth in this Agreement for construction of <br />Improvements approved by the City. The CDBG Loan is funded with the City’s allocation of CDBG Funds. <br />The CDBG Loan shall be evidenced by a CDBG Note, which shall be dated as of the Effective Date. <br /> <br /> 1.1.1. FEDERAL AWARD IDENTIFICATION. Federal award identification information <br />regarding the funding provided to Participant by this Agreement, as required by 24 CFR 200.331, is <br />included in Exhibit C, attached hereto and incorporated herein. <br /> <br /> 1.2 REPAYMENT; INTEREST RATE; FORGIVENESS. <br /> <br /> 1.2.1 LOAN TERM AND REPAYMENT. The Term of this Agreement shall be ten (10) <br />years. Provided that Participant is not in default under the Loan Documents, the City shall forgive one tenth <br />(1/10th) of the principal of the CDBG Loan, which is equal to Fourteen Thousand Three Hundred Seventy <br />Two Dollars and Fifty Cents ($14,372.50), annually on the anniversary of the Effective Date. On the tenth <br />(10th) anniversary of the Effective Date, provided that no default or breach by Participant has occurred <br />pursuant to Article IV, the entire outstanding principal and interest accrued on the CDBG Loan shall be <br />forgiven. If Participant sells or transfers the Property or changes the use of the Property without written <br />approval from the City, the CDBG Loan shall become due and payable upon sale. <br /> <br /> 1.2.2 TIMELINE TO SPEND THE LOAN. Participant shall expend the entire CDBG Loan <br />within twenty-four (24) months of the effective date of this Agreement. <br /> <br /> 1.2.3 INTEREST. Interest shall accrue on the principal balance of the CDBG Loan at a <br />rate of three percent (3%) simple interest per annum. <br /> <br />1.3 PREPAYMENT. Participant may, without premium or penalty, at any time and from time to <br />time, prepay all or any portion of the outstanding principal balance due under the CDBG Note. Any <br />prepayment of principal must be accompanied by interest accrued but unpaid to the date of receipt of <br />prepayment. Prepayments shall be applied first to any unpaid late charges and other costs and fees then <br />due, then to accrued but unpaid interest and then to principal. <br /> <br />1.4 USE OF PROCEEDS. Participant shall use the proceeds of the CDBG Loan (the “CDBG Loan Proceeds”) solely and exclusively to pay for the construction of the Improvements described in Exhibit <br />B and in accordance with the budget and timeline specified in Exhibit B. <br /> <br />361